Earlier this month, US domestic steel mills joined in solidarity to announce a sweeping round of flat rolled steel price increases. Nucor and US Steel announced a $2.50 cwt. ($55/mt or $50/nt) increase for domestic CRC, whereas AMUSA set a new minimum base price of $35 cwt. ($772/mt or $700/nt) ex-mill.
Although prices have moved up slightly since the increase, they haven’t moved as much as mills had hoped.
Since the announcement, CRC spot prices have risen by $2.00 cwt. ($22/mt or $20/nt), from $30-$32 cwt. ($661-$705/mt or $600-$640/nt), ex-mill, to $32-$34 cwt. ($705-$750/mt or $640-$680/nt), ex-mill. Sources say they believe the increase is linked to two factors. The first had to do with mills padding their order books with “bargain basement-priced orders,” as a means of helping to push out lead times.
The second factor relates to increased scrap prices during this month’s buy cycle. Whether US flats mills will get to their desired price point has yet to be determined, however, buyers agree that "the deep discounts are gone."
Other upsides to the market include renewed production within the automotive sector, which is expected to help demand. SteelOrbis sources further believe that mills are already mulling another price increase, noting that if scrap trends up in June, as expected, that a second price increase is likely imminent.