In late June, US domestic flat rolled steel mills announced they would be raising prices by $2.00 cwt. ($44/mt or $40/nt), ex-mill, effective immediately. A second $2.00 cwt. ($44/mt or $40/nt) increase announcement was sent out to customers earlier this week.
And while prices haven’t climbed sharply since the announcements were made, prices have revised upward, from $25-$27 cwt. ($551-$595/mt or $500-$540/nt), ex-mill, to $26-$28 cwt. ($573-$617/mt or $520-$560/nt), ex-mill.
Sources close to SteelOrbis say that “deep discounts are no longer available,” as flats mills are waiting to see how much order placement will be spurred by the announcements. Skeptics believe that orders will be significant enough that prices are pushed upward in the short term, but in the absence of domestic mills deciding to make significant, long-term cuts to capacity, prices could begin to soften again toward the middle-to-end of Q3.
Earlier this week, the American Iron and Steel Institute (AISI) reported that for the week ending July 6, the domestic capacitiy utilization rate was at 79.4 percent, compared to 77.4 percent during the same reporting period last year. Adjusted year-to-date production through July 6 was 50,458,000 net tons, at a capability utilization rate of 81.2 percent. That is up 5.3 percent from the 47,918,000 net tons during the same period last year, when the capability utilization rate was 76.7 percent.