Will price increases be enough to end US flats market’s slide?

AK Steel's $2.50 cwt. ($55/mt or $50/nt) immediate increase on all flat rolled products Wednesday came as a surprise to most market players, especially with US lead times remaining as short as two weeks on hot rolled coil (HRC) at some mills, production levels increasing, and rampant price cutting still evident. The announcement was unexpected--and according to some, unwarranted--since domestic scrap prices went sideways to down this month. Nevertheless, Nucor, California Steel Industries, and NLMK USA followed with a more moderate $1.50 cwt. ($33/mt or $30/nt) increase (other mills are expected to follow in the coming days), giving the increase some validity according to SteelOrbis sources, as demand levels remain steady. While the increase isn't likely to have any immediate effect on spot prices, some of the lowest deals may dry up over the next week or two.

Both HRC and cold rolled coil (CRC) spot prices are unchanged from last week, but deals as much as $1.00 cwt. ($22/mt or $20/nt) under the current HRC spot price range have become more common. Although industry insiders report they are skeptical that mills will actually be able to firm up spot prices with unchanged US supply/demand levels, the increase is likely to force some buyers that haven't placed orders in weeks to lock in offers in case prices do firm. Expectedly, because the US flats market future trend isn't certain, import activity remains extremely quiet, with the exception of a few sporadic orders being placed with Mexican mills.

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