US Steel today announced plans to raise base pricing for HRC, CRC and HDG coil by a minimum of $2.00 cwt. ($44/mt or $40/nt), effective immediately.
The timing of the increase, sources note, is questionable, considering that lead times are short, July scrap prices trended downward, and that spot market prices have been faltering. It’s further projected that while cut grade scrap could trade at sideways during the August buy-cycle, which, at the current moment, seems to be supported by activity within the export markets, that busheling scrap will come down by $20-$30/gt ($20-$30/mt).
“While I think the market was headed towards a bottom by the end of July/early August, the USS announcement caught me off guard. Just seems to be a bit early,” a source said. “Maybe it will shake enough pending demand off the sidelines and ease us into a turn, but… I have my doubts.”
Others have speculated that the announcement may be a strategy "to establish a pricing floor and prevent prices from slipping any further."
AK Steel announced a similar increase several hours after US Steel's announcent. Toward the end of the day, AK Steel said they also plan to raise prices on HRC, CRC and HDG coil by $2.00 cwt. ($22/mt or $20/nt) effective with all new orders.