A number of mills have issued price increases in the last couple days, aiming to stem the tide of precipitous US domestic flat-rolled steel price declines.
On Wednesday, US Steel sent a letter to customers indicating a $3.00 cwt. ($66/mt or $60/nt) immediate increase on flat-rolled spot orders, predicated on high raw material costs (likely a reference to iron ore prices considering busheling scrap prices stayed largely sideways in August, according to SteelOrbis' scrap index) and the fact that "spot transaction prices have deteriorated in contrast to end-user demand fundamentals which remain firm and/or forecasted to increase." Other price increase letters were far less detailed, offering little or no explanation for the move. Regardless, AK Steel quickly matched the increase, which was then followed by other flats mills--either by a letter to customers or an internal company announcement--including Nucor, ArcelorMittal USA, the US-branches of the NLMK mills, and California Steel Industries on the West Coast.
The uniform move to raise domestic flats spot prices by $3.00 cwt. is vastly different from the last increases the flats market saw back in May. While some mills at that time issued an official transaction price increase for about $2.00-$3.00 cwt. ($44-$66/mt or $40-$60/nt), others only indicated new base prices, which essentially reflected a transaction price of as much as $4.00 cwt. ($88/mt or $80/nt) higher than what current spot prices were at the time. But the contrasting price announcements had no effect on spot prices in May; after prices stayed neutral for about three weeks, they began softening once again.
Therefore, industry insiders are speculating that the united nature of this week's price announcements may have a more prominent upward effect on spot prices, although it is too early to tell one way or the other. However, even before the increase announcements, domestic flat-rolled spot prices had already fallen from the previous week. Domestic hot rolled coil (HRC) spot prices fell $1.00 cwt. ($22/mt or $20/nt) to $31.00-$33.00 cwt. ($683-$728/mt or $620-$660/nt) ex-Midwest mill, while cold rolled coil (CRC) spot prices have dropped $2.00 cwt. ($44/mt or $40/nt) since last week to $36.00-$38.00 cwt. ($794-$838/mt or $720-$760/nt) ex-Midwest mill as flats mills have been increasingly striking deals on CRC to fill empty order books.
If the price increases do result in a firming of US domestic spot prices, then it could reignite import activity, which continues to be extremely lethargic. But for now, both HRC offer prices from Mexico and Korea and CRC prices from Mexico and China have stayed neutral once again in the last week as US domestic prices fell, making the least expensive import offer--coming from Mexico--now about $3.00 cwt. higher than US spot prices.
| Cwt. | Metric Ton (mt) | Net ton (nt) | Change from last week | |
| US domestic | ||||
| HRC | $31.00-$33.00 | $683-$728 | $620-$660 | ↓ $1.00 cwt. |
| CRC | $36.00-$38.00 | $794-$838 | $720-$760 | ↓ $2.00 cwt. |
| Mexico* | ||||
| HRC | $34.00-$35.00 | $750-$772 | $680-$700 | neutral |
| CRC | $40.00-$41.00 | $882-$904 | $800-$820 | neutral |
| China** | ||||
| CRC | $41.00-$42.00 | $904-$926 | $820-$840 | neutral |
| Korea** | ||||
| HRC | $37.00-$39.00 | $816-$860 | $740-$780 | neutral |
**DDP loaded truck in US West Coast ports