Can a third price increase sustain the US flats market?

As US domestic flat rolled spot prices were on the verge of a decline, Nucor announced that it would be raising prices by $1.00 cwt. ($22/mt or $20/nt). By Friday, ArcelorMittal USA also announced a $1.00 cwt. increase and AK Steel issued a $1.50 cwt. ($33/mt or $30/nt) immediate price increase--other mills were slated to follow with a similar increase of their own. The increases had been anticipated since just after the Thanksgiving holiday, when the spot market's uptrend ground to a halt. The increase came just as it appeared that flat rolled spots were wavering a bit and mills were making deals as necessary in order to entice buyers to place orders. Activity levels have been extremely quiet this past week with most buyers abstaining from booking tonnages not immediately needed. Sources told SteelOrbis that the timid $1.00-$1.50 cwt. increases--as compared to the previous increases that were at least double--indicates that mills are not expecting to actually raise spots much before the end of the year, and the move was essentially to prevent prices from softening before January.

The impact of this third round of increases isn't certain yet, but at the very least, hot rolled coil (HRC) and cold rolled coil (CRC) spot prices are holding firm at the moment. Import activity in the US has been similarly quiet this past week. Traders have said that there have been plenty of calls from customers looking to "check prices and compare," but few actually placing orders. Mexican mills have been trying to raise their offer prices but even demand for Mexican product has been minimal lately, and prices are likely easily negotiable for a substantial enough order. New Chinese CRC CFR offer prices went up by $10/mt this past week, but the increase has yet to translate into higher sales prices in the US.

**DDP loaded truck delivered into Houston