United States Steel (USS) yesterday may have announced plans to raise US domestic HRC, CRC, and HDG coil prices by $2.50 cwt. ($55/mt or $50/nt) effective with all new orders, but sources close to SteelOrbis say that lagging order activity, “extremely short lead times” and buyers’ reluctance to stock up amidst what they see as a downtrading market, has them thinking that the increase “isn’t going to move the market.”
Lead times for HRC are as short as 2-4 weeks, another source pointed out, adding that lead times for HDG and CRC, which have been calculated at 4-6 weeks depending on the mil of origin, “aren’t faring much better.”
“I don’t think anyone takes USS’ announcement seriously,” a third source said.
Current HRC prices are down by $3.00 cwt. ($66/mt or $60/nt) week over week to an average transaction range of $43-$46 cwt. ($948-$1,014/mt or $860-$920/nt), FOB mill. Cold rolled and Galvanized prices are also down week-over-week and are now trending at approximately $50-$53 cwt ($1,102- $1,168/mt or $1,000-$1,060/nt), FOB mill, for both products.
Similar to previous weeks, deals slightly below (and above) these ranges have been heard within the marketplace based on order volume.
Sources for each market segment have reported similar market conditions, including service centers who are not booking tons from mills unless their customers have already placed orders, a widespread reluctance to build inventory, and skepticism that prices will firm amidst weak demand and falling raw materials prices.
As far as other mills’ moving to follow USS’ June 14 price increase, sources have said they do not believe the other mills will follow, adding that “resistance to price increases based on the current state of the market would be swift and stern.”