Flat-rolled steel prices firming despite tepid demand

Dec 08, 2009 | 09:56 AM | Scott Robertson

A continued lack of steel demand, a situation many expect will last well into the first quarter, is unlikely to prevent North American steel producers from achieving a price hike of as much as $70 per ton for carbon flat-rolled steel by February, according to market sources, who believe rising costs remain the driver behind the proposed increases.

"Watch where scrap goes," one Midwest service center source said. "That will tell you. Right now scrap is going up, so this is all cost-driven."

Asked if he saw any signs of pending improvements in steel demand developing in January or February, he answered with one word: "No."

North American steel producers announced late last month their intent to hike transaction prices on sheet products—hot-rolled, cold-rolled and hot-dip galvanized sheet—by $30 per ton effective with Jan. 1 shipments. That announcement was followed less than a week later by additional announcements of increases of as much as $40 per ton on the same products effective with Feb. 1 shipments.

Hot-rolled sheet is currently selling on the spot market for $500 per ton ($25 per hundredweight) for December deliveries, with cold-rolled sheet in a range of $600 to $610 per ton ($30 to $30.50 per cwt) and hot-dip galvanized at about $750 per ton ($37.50 per cwt), with the hot-dip price comprising a base price plus a G-90 coating weight on 1-millimeter-thick material.....