While predictions for the scrap increase ranged from $30-$50/long ton, the actual numbers came in slightly less than the lower end of the range. Shredded scrap went up only $28/lt, and busheling and HMS I both rose by a meager $20/lt. Already, speculation is growing that scrap could very well soften as soon as October, which has left some mills cautious about how to react.
Long product mills have not yet announced their new price lists, but it is expected that both wire rod and rebar mills will not push for the full raw materials increase. Demand is steady for the two products, but not spectacular, so they will likely take their time coming to a decision that they think will be accepted by customers.
For rebar specifically, spot prices did not fully catch up with the September 1-effective price increase, so mills might tack any new increase onto current market prices, rather than their "official" list prices. Wire rod mills, on the other hand, are in a better position to charge whatever they want, considering imports are too high to be competitive.
However, it is unclear at this time whether merchant bar mills will raise prices at all. Reaction to the last price increase was tepid, and buyers continue to make purchases on an as-needed basis. Also, large-scale service centers have been inexplicably slashing prices lately, to the consternation of mills and smaller service centers alike. Additionally, several low-priced import shipments are expected soon, and mills will probably want to keep the margin between foreign and domestic prices as narrow as possible.
As for flats, the $40/nt increase announcement has trickled it way into the marketplace, but buyers are still unsure how, or if, the increase will be absorbed. The only thing that's certain is that mills are steadfastly pushing for the increase. However, considering the overall situation of overproduction, short lead times (approximately three weeks for HRC, four for CRC), and stagnant order activity, confidence that mills will be able to maintain solidarity in pricing levels remains weak. Another challenge on the horizon is the ever-looming contract season-failing to get prices up, or worse, seeing them soften, could prove to be disastrous to both mills' and service centers' bottom lines. For now, though, the trend for HRC and CRC is neutral to slightly up, with order activity over the next couple of weeks expected to be light while domestic buyers watch-and-wait to see how the dust settles prior to making a purchase.
Coated products are in a similar situation, with HDG mills unsuccessfully pushing to get prices up. Considering lead times for coated products still fall in the range of four to five weeks, buyers are questioning exactly how much leverage mills will have. Short lead times mean softer order books, and softer order books mean salespeople continue to be under pressure to book tons. Purchasing managers are continuing to report an overt lack of belief that "anything will be coming around the corner which will have people wanting to buy more steel", and it's believed that the trend of closely (and tightly) managing inventory levels will once again begin to run rampant.
Plate prices, on the other hand, have not seen much difficulty maintaining an upward trend, with spot prices moving up $20/nt in the last two weeks. Additionally, there is a strong anticipation that another increase may emerge before the close of September. According to a number of service centers, plate has been relatively immune to the up-again down-again up-again trend currently seen for other flats products, because plate producers "seem to have a better grasp of supply and demand" then the people who are rolling coils.