By Steven Frank and Rob Delaney Dec. 30 (Bloomberg) -- Steel prices in the U.S. fell 1.6 percent in December because of reduced demand from manufacturers, Purchasing magazine said. The average price of hot-rolled steel sheet, the benchmark product used in cars and appliances, dropped to $500 a ton from $508 in November, Purchasing said today in a monthly update. Cold-rolled sheet decreased 1.5 percent to $598 a ton. The deepest U.S. recession in seven decades has cut demand for the metal used in construction and manufacturing. Capacity utilization among steel mills in the U.S. has been 51 percent this year, according to the American Iron and Steel Institute. “Steel buyers at original equipment manufacturing (OEM) companies bought few tons in December -- and paid the lowest transaction prices for sheet metal in five months,” Purchasing executive editor Tom Stundza said in the report. Steel prices reached a five-year low of $380 a ton in June, a 64 percent drop from a record $1,068 a ton in July 2008. To contact the reporters on this story: Steven Frank in Toronto at sfrank9@bloomberg.net; Rob Delaney in Toronto at robdelaney@bloomberg.net.

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