US flats mills attempt market turnaround with price increases

Essentially all US domestic flat rolled mills have now issued price increases to their customers, but so far no change in spot prices or activity levels has been evident. In a leading move Wednesday, US Steel sent a letter to customers indicating an immediate $2.50 cwt. ($55/mt or $50/nt) price increase on all flat rolled steel products. By Friday, most other mills had followed suit. While AK Steel released a letter similar to US Steel's, other mills, including Nucor, Severstal NA, NLMK USA and ArcelorMittal USA instead announced that their new base prices would be $30.50 cwt. ($672/mt or $610/nt) on hot rolled coil (HRC) and $35.50 cwt. ($783/mt or $710/nt) on cold rolled coil (CRC). It is too soon to determine the impact of the increase announcements, although most remain skeptical.

Many customers are still placing orders using at sub-CRU prices rather than paying spot market prices anyhow, and raw steel production levels continuing to rise is keeping buyers cautiously maintaining inventory levels. Lead times on HRC are still only about two weeks, and sources contend that until lead times push out, there is little chance that spot prices will move higher. For now, HRC and CRC spots are stable from last week, but it is still unclear whether spot prices could still fall further. Too much uncertainty domestically is still keeping futures activity at a minimum, so Chinese mills continue to drop offer prices to the US. Chinese CRC offer prices have fallen $0.50 cwt. ($11/mt or $10/nt) since last week to $32.00-$33.00 cwt. ($705-$728/mt or $640-$650/nt) DDP loaded truck in US Gulf ports, although orders $0.50-$0.75 cwt. ($11-$17/mt or $10-$15/nt) lower have been placed for delivery into the US West Coast.

*DDP loaded truck in US Gulf ports
**DDP loaded truck delivered into Houston