US flat rolled prices firm as mills roll out second price increase

As predicted in last week's report, US domestic flat rolled mills have announced a second round of price increases, as the market continues to show upward strength. On Thursday, AK Steel told customers it would be raising spot prices $2.00 cwt. ($44/mt or $40/nt), following a $2.50 cwt. ($55/mt or $50/nt) price increase in late May. That same day, ArcelorMittal USA informed customers of its new base prices--$31.50 cwt. ($695/mt or $630/nt) on hot rolled coil and $36.50 cwt. ($805/mt or $730/nt) on CRC and coated flat steel products. Neither mill gave a reason for the increase, but a letter from NLMK USA Friday was more specific, raising all sheet base prices by $1.50 cwt. ($33/mt or $30/nt) due to improved demand levels and extending lead times.

But while purchasing activity did pick up immediately following mills' first increase, order entry has since slowed. Still, the earlier flurry did indeed push out lead times in July on all flat rolled products, which sources say was more than enough motivation for mills to try for a second increase--especially considering that spots have not risen by the full $2.50 cwt. increase announced in May. HRC spots are stable from levels reported a week ago, but trending toward the high end of the range. CRC spots, meanwhile, have firmed $1.00 cwt. ($22/mt or $20/nt) on the low end as mills have been more adamant about higher prices on new transactions. As a result, Mexican HRC offer prices to the US have also increased, and are anticipated to continue to follow the US domestic market's trend.

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