Will US domestic flat rolled prices continue to climb?

Now that the remainder of US domestic flat rolled mills have informed customers of their intention to raise spot prices further, lower-priced deals have become less common. Since ArcelorMittal USA's June 13 letter announcing the second price increase in less than a month--this time for $1.50 cwt. ($33/mt or $30/nt)--other mills have followed with increase announcements of their own, although most have been via company memos/phone calls, rather than official letters. In general, however, mills are targeting $31.50 cwt. ($694/mt or $630/nt) on hot rolled coil (HRC) and $36.50 cwt. ($805/mt or $730/nt) on cold rolled coil (CRC), and have gotten closer to those levels over the past week. Nevertheless, purchasing activity is still only moderate as customers are not confident enough in the higher prices to buy more material than necessary in the short term.

Flat rolled inventories reached unusually low levels by the end of May, Metals Service Center Institute (MSCI) data showed this past week, so restocking earlier this month pushed spot prices higher. Since then, however, activity levels have slowed somewhat, but mills aren't relinquishing the gains they've made so far. Sources tell SteelOrbis that mills are standing firm on their increases with new orders, allowing both HRC and CRC spot prices to firm $1.00 cwt. ($22/mt or $20/nt) on the high end over the last week. Some of the lower-priced deals are still lingering, but becoming less and less common, especially with early predictions pointing to an increase in scrap prices next month. Expectedly, Mexican mills have followed the US domestic price trend, raising their HRC offer prices; but for the most part, import activity remains only sporadic.

*DDP loaded truck in US Gulf ports

**DDP loaded truck delivered into Houston