US domestic scrap prices are trending up across the board this month and flats mills continue to use increased input costs as a means of raising prices. Earlier this week, NLMK USA announced they would be raising flat rolled spot market prices by $2.00 cwt. ($44/mt or $40/nt) effective immediately for all new orders.
The NLMK announcement comes on the heels of a weeks-long firming trend for US domestic hot rolled coil (HRC) prices. The most commonly reported ex-Midwest mill spot price transaction range has firmed by approximately $1.50 cwt. ($33/mt or $30/nt) since our last report a week ago, bringing the current average spot market transaction range to $22.00-$23.50 cwt. ($485-$518/mt or $440-$470/nt).
Based on this month’s uptick in domestic scrap prices, it’s believed that US HRC prices will continue to firm. Sources close to SteelOrbis continue to report that these increases are “definitely not demand based” and are more about increased raw materials costs.
“The HRC market is still challenged due to weak activity from the energy pipe mills,” another source added. “Flats prices will rise as long as raw materials costs are up, but if scrap starts to tumble back down, as some people speculate could happen come summer, HRC prices could be vulnerable to correction.”