US transaction prices are going through the roof with gains over the last four weeks as high as $US145 per tonne for some products and more substantial hikes planned by the mills for June deliveries. Domestic values have now caught up with average world prices. Although real demand is no more than satisfactory as the economy weakens, supply is being allocated by the local mills. The availability of imports is virtually nil, due to the weak US dollar, high ocean freight rates and soaring prices in other regions. OEM’s complain that expected delivery times are not being met. Inventories at the service centres are described as ‘low to medium’. They are unlikely to be rebuilt in the short term as buyers are unwilling to speculate when steel is so expensive.
In Canada, domestic order intake is strong. Producers need to offset the large increases in raw materials, such as iron ore and scrap. Consequently transaction values continue to advance, despite alarm amongst customers. Current imports and permits for the future remain low.