Second round of price increases drives US flats prices higher

In less than a month, US domestic flat rolled mills have announced price increases totaling $4.50 cwt. ($99/mt or $90/nt), and spot prices are now beginning to quickly rise. Over the past week, AK Steel announced an immediate $2.50 cwt. ($55/mt or $50/nt) price increase, in addition to mid-October's $2.00 cwt. ($44/mt or $40/nt) increase, and was quickly followed by Nucor. Other mills such as ArcelorMittal and NLMK also followed, but without an official increase letter to customers. While mills gave no direct reason for the increase, it coincides with an approximately $50-$60/lt jump in scrap prices for November. Sources told SteelOrbis that some mills began quoting higher hot rolled coil (HRC) prices of $32.50-$33.50 cwt. ($716-$739/mt or $650-$670/nt) ex-mill immediately following the second increase, while others let customers place orders at previous prices. Either way, order entry at the mills has improved over the last week and HRC and cold rolled coil (CRC) spot prices are up $1.00 cwt. ($22/mt or $20/nt), and are only expected to rise further in the next couple weeks.

In addition to a scrap price boost this month, extended lead times due to higher booking activity is also helping mills push through at least a portion of their announced price increases. Lead times are now into mid- to late December on all flat rolled products, with a few producers already claiming to be close to closing December. The optimistic domestic price trend has renewed some US buyers' interest in the import market, even as import prices are also on the rise. China has raised its CRC offer prices to the US and Mexican mills are expected to issue an increase as well once new offers are released. A decent amount of Mexican HRC orders were taken on the West Coast in the last couple weeks, according to traders, due to US West Coast flats mills quickly filling up order books.

*DDP loaded truck in US Gulf ports

**DDP loaded truck delivered into Houston