On Tuesday, US Steel sent letters to its customers to let them know the mill planned to raise prices on HRC, CRC and HDG coil by $2.00 cwt. ($44/mt or $40/nt), effective immediately. SteelOrbis’ sources were immediately skeptical, noting that short lead times, soft scrap prices and less-than-desirable demand for finished steel products “make it hard to believe that any sort of price increase would be accepted.”
AK Steel, UPI and AMUSA were quick to join the party. And while there has been some modest fluctuation in pricing during the current week, with HRC prices firming nominally before settling back down, SteelOrbis sources say they’re not convinced the mills will succeed in pushing prices higher.
“I think the mills may have booked a few tons at a slightly, and I emphasize slightly higher rate in the middle of the week, but if anything, that was a psychological reaction,” a source said. “Between the explosion at Burns Harbor last week, which took a furnace offline, and the price increase, I think that was enough to scare a few buyers off the sidelines. Will the increase have sticking power? I don’t think so. The market fundamentals just aren’t there.”
US HRC continue to hold at an average of $22-$23 cwt. ($485-$507/mt or $440-$460/nt), ex-mill, whereas US CRC prices are still being heard at $30-$32 cwt. ($661-$705/mt or $600-$640/nt), ex-mill. As with last week, deals up to $1.00 cwt. ($22/mt or $20/nt) below that range have been heard in the marketplace, on a case-by-case basis.
“I have a hard time believing that [flat rolled steel] prices will start climbing again,” another source said. “Yes, there seemed to be a few indicators earlier in the month that were positive, but the situation is constantly changing. This week, we learned that another 1.4 million Americans filed for unemployment in the past week, medical professionals are practically begging the government to shut [the nation] back down—because we’re suffering the consequences of reopening the economy too quickly, and mills’ capacity utilization rates are still climbing. Could price start to firm? Sure. Does it seem plausible that it’s going to happen now? No.”