US flats market awaits impact of announced price increases

The timing of price increases from US mills this past week came as a surprise, and whether the move will be successful is still up for debate. On Tuesday, US Steel began informing customers by phone that it was increasing its flat rolled prices by $2.00 cwt. ($44/mt or $40/nt) effective immediately with new orders. By Thursday, other producers had followed, including Nucor, AK Steel, Severstal North America (which issued new base prices), NLMK USA, California Steel Industries, and ArcelorMittal. Even though a price increase has been anticipated over the past couple weeks given major spot price declines domestically, most were expecting mills to wait a little longer before making the announcements. While scrap predictions for November are currently pointing to a sideways to up trend, it's too soon to tell exactly where the market will settle--and without a scrap increase, sources tell SteelOrbis that mills will find it difficult to push up spots.

For the time being, at least, the price slide has slowed, and hot rolled coil (HRC) spot prices are still in the range of $28.00-$29.00 cwt. ($617-$639/mt or $560-$580/nt) ex-Midwest mill, with a few larger orders still being placed under the range. Many are skeptical as to whether mills will actually be able to increase prices by the full $2.00 cwt., but it may force some buyers that had been sitting on the sidelines to place a few orders. Import prices, meanwhile, are unchanged from last week. Chinese mills have not tried to increase their cold rolled coil (CRC) export prices to the US any further but have also been unwilling to accept any decrease. Should the US price increases positively impact domestic spot prices, however, Chinese mills may grow more bullish on increasing their own offers.

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