Domestic flat rolled prices for April have been announced and all major mills are upping prices to various degrees.
The first April pricing announcement came from AK Steel, with prices set to increase by $30 /nt ($33 /mt or $1.50 cwt.) for April orders. As expected, ArcelorMittal followed suit and upped its hot rolled prices by $35 /nt ($39 /mt or $1.75 cwt.). Then came Nucor, ahead of its competitors with a $60 /nt ($66 /mt or $3.00 cwt.) increase announcement for April orders.
These newly announced April increases are following some hefty February and March price hikes and put domestic hot rolled offers in the range of $36.00 cwt. to $37.00 cwt. ($794 /mt to $816 /mt or $720 /nt to $740 /nt) FOB mill. Domestic cold rolled offers are now ranging from $40.50 cwt. to $41.50 cwt. ($893 /mt to $915 /mt or $810 /nt to $830 /nt) FOB mill. Prices are based on the US Midwest region.
There is no doubt that these April price increases will stick. Although end-use demand isn't improving, supply is tight and inventories are low. Also, import competition is non-existent. However, this time around, domestic mills attributed their increases more to supply and demand issues, and not necessarily raw material costs. Busheling scrap prices fell $10 /long ton in February, yet domestic flat rolled mills increased their prices, with the most aggressive increase coming from a scrap consumer, Nucor.
Buyers are now wondering if there will be yet another increase announced for May. According to market players, the flat rolled market has not peaked yet and another increase is definitely in the market's future; however, it is hard to tell if it will be immediately following the large April increases or if the market will get a chance to cool off for a month before mills up their prices again in June.
The hot rolled market is tighter than the cold rolled market. The automotive market has been suffering, leaving cold rolled products at a disadvantage compared to hot rolled. Although overall flat rolled demand is not great, anything related to the energy markets has been doing well, which is a good sign for hot rolled products.
On the import side, China is back from the Chinese New Year holiday; however, no cold rolled offers have been made to the US as of yet. There have been some galvanized offers to the West Coast which are up significantly since their last offering.
According to license data from the US Import Administration, for the first half of February 2008, worldwide hot rolled export tonnage to the US totaled 140,396 mt, with the top three exporters being South Korea at 55,382 mt, Australia at 28,484 mt, and Canada at 27,551 mt.
Worldwide cold rolled exports to the US totaled 31,102 mt for the first half of February, according to data from the US Import Administration. Canada was the largest player with 8,880 mt, followed by China with 5,626 mt, and Japan with 3,958 mt.