US Steel’s announcement that it may idle its Granite City, Illinois, plant is a small but sure step in the right direction for the beleaguered flat-rolled market, Kallanish learns from industry observers.

Last year, US Steel opted not to idle its 2.8 million short tons/year Granite City operations. This year, however, the market looks soft enough for the company to follow through, says one buy-side source.

“This time, we think it will be different,” he says, adding that market chatter is growing about other integrated mills initiating shutdowns.

With hot-rolled hovering around a $420/short ton midpoint, he says, “… the integrated mills are in huge trouble.”

US Steel and ArcelorMittal’s ongoing negotiations with the United Steelworkers could be an additional avenue for supply constriction, he says.

“[… I] would not be surprised if a lockout took place,” he says. USW members have been working at US Steel and ArcelorMittal facilities under the terms of an expired contract since 1 September.

A second buy-side source called Granite City’s potential idling a “... non-event” considering the weak state of the market.

The supply-demand imbalance will become particularly lopsided if the United Autoworkers at Fiat-Chrysler Automobile’s plants strike, he says. The union has notified FCA that its contract extension with the Big Three lead negotiator expires just before midnight 7 October.

“If there’s an auto strike, the new [… hot-rolled] bottom will be in the $370-380/st area,” he says.

Kallanish currently has HRC prices at $410-430/st and CRC prices at $540-560/st.