-Any expected barrage of buying that was to be spurred on by RG hot idling Sparrows Point has failed to materialize.  However, for the time being, the mills established a $ 740 beach head.  Anecdotal evidence showed apparent demand to be soft during the first week of 2012. Nucor has denied rumors published by the AMM that they had raised the price to $770.  Scrap, while briefly spiking late to mid-month last month looks like it may be pulling back to a degree.  Rumors are that shredded has already fallen back to November numbers.  Of note is the Turkish scrap curve which is around $450/metric tonne for the balance of the year.  The dollar continues to strengthen against the Euro.

-We believe that significant import contract volumes are being concluded for March/April.  HRB from Italy and Russia are between $635 and $660 c&f.  The price disparity between the USA and Europe is unsustainable.  Feb Northern European futures prices are $605 / short ton. This is a significant risk factor when looking at domestic bands @ or above $740/short ton.      

-The USA economy appears to be strengthening.  Some jobs are being consistently created and demand for steel looks to be about 5% stronger year over year.  Lead time for steel is fairly stable and mill books are relatively healthy with production into mid- February across the board.   

-Production dates are being scrutinized at the moment in light of the significant delta that exists between US and global band prices.  The lag between order and delivery has always been a concern when domestic buyers consider imported metal.  In these volatile times, markets can move significantly during one’s wait for imported bands.  But if a buyer must wait well into March for domestic coils, a cheaper Russian product looks much more attractive with lead time parity to North American supply alternatives.