Earlier today, Nucor and Cleveland-Cliffs announced plans to once again raise flat rolled steel prices. According to the announcements, both mills indicated they’re raising prices by a minimum of $2.50 cwt. ($55/mt or $50/nt) for HRC, CRC, and HDG coil effective with all new orders.
They’ve also established a new minimum base price of $45 cwt. ($992/mt or $900/nt) for hot rolled coil.
US Steel also announced plans to raise their sheet steel prices by $2.50 cwt. ($55/mt or $50/nt) with all new orders, however, US Steel did not announce a minimum base price for HRC.
This is the second increase announcement pushed out by mills in approximately 2 weeks, and the 5th increase announcement that’s been rolled out since late-November
As of late-day Friday, February 10, the average HRC spot market price range was trending at $38-$40 cwt. ($838-$882/mt or $760-$800/nt), FOB mill, although some sources had indicated that small-tonnage spot market transactions were taking place up to $2.00 cwt. ($44/mt or $40/nt) above that range.
Yet despite mills’ desire to push hot rolled to $45 cwt. in short order, market sources have been quick to point out that lead times are still “at or below six weeks” and that the domestic capacity utilization rate is “hardly exciting.”
As of the time of publication, the most recent data from the American Iron And Steel Institute indicates that for week ending February 4, the domestic capacity utilization rate was recorded at 74.1%, against 80.4% during the same reporting period in 2022.
And while some think that the market could inch up a bit more, especially in that imports “are essentially a non-factor right now” others have called today’s announcement “a pile of poppycock.”
“If you look at the full scope of things, [US] scrap prices have a strong potential of coming down in March since export cargos into Turkey are likely going to be non-existent in the short term,” a source said. “And if scrap starts to come down I think the mills know they’re going to start getting a lot more pushback on pricing. There’s also the fact that the mills are going to average their Q1 prices to set their contract prices for Q2, so of course they want to get March prices as high as they can. I think today’s announcement is more of a strategical move than anything else.”
Others agree that $45 cwt. "doesn't make sense based on lead times and market demand."
Whether the increase will gain full acceptance has yet to be known, and for now, opinions remain mixed.
"Could prices get there? Maybe," a final source said. "But if hot rolled does wind up scratching the surface of $45 cwt. I don't think it will stay there for long."