Price increase announcements flood US domestic flats market

The domestic flats market in the US has experienced significant upward momentum over the past week as most mills issued price increase announcements, and further increases are predicted.

On Monday, Nucor rolled out an expected $2.00 cwt. ($44/mt or $40/nt) increase on all flat-rolled products effective immediately. Shortly after, US Steel had issued a $2.50 cwt. ($55/mt or $50/nt) price increase, and NLMK Indiana, Duferco, and Sharon Coating, as well as California Steel Industries (CSI), among others, quickly began to announce price increases of their own.

Toward the latter half of the week rumors began to surface that Nucor would be issuing yet another $2.00 cwt. price increase effective for all February deliveries, which would undoubtedly be followed by most other US mills. After this additional increase officially takes hold, transaction prices will have surged approximately $5.00 cwt. ($110/mt or $100/nt) since the beginning of last month. "This kind of increase makes me nervous" commented one distributor in the South. And with no real demand increase from end-users, some are afraid that "when prices go up this high, this fast, there's nowhere to go but down."

However, as of right now, industry insiders predict that flat rolled prices are poised to continue their stable-to-upward trend, at least through the month of February; and scrap prices, which are up an additional $35-$45/lt this month, will remain the driving force behind the increases.

Hot rolled coil (HRC) spot prices are up $2.00-$3.00 cwt. ($44-$66/mt or $40-$60/nt) since our last report a week ago and the most commonly reported transaction ranges are now between $30.00-$32.00 cwt. ($661-$705/mt or $600-$640/nt) ex-Midwest mill, and although after the next increase most transactions will move toward the higher end of the range, some deals just below $30.00 cwt. may still be available through the end of this week. Lead times for HRC are now entirely into January and some mills are reportedly beginning to close January order books already.

Spot prices in the domestic cold rolled coil (CRC) market are up about $3.00 since just before Thanksgiving, and most orders are now being booked at $35.00-$37.00 cwt. ($772-$816/mt or $700-$740/nt) ex-Midwest mill. As with HRC, sporadic bookings have been reported below the lowest end of the range, although they too are fading quickly. "If you want to secure an order at lower prices, you have about 48-72 hours to make your move" one trader in the South explained to SteelOrbis.

On the import side, Mexico continues to remain active in its HRC and CRC offerings, and it looks as though some mills have already closed their books for January deliveries. China, which was rumored to be lowering its sales price, has apparently made no such move just yet, and is reportedly booking orders at $36.00-$37.00 cwt. ($794-$816/mt or $720-$740/nt) FOB loaded truck in US West Coast ports.

*FOB loaded truck delivered to Houston ports

**FOB loaded truck in US West Coast ports