NEW YORK The recent round of steel sheet price hike announcements has led to higher quotes across the board, though whether the firmer tags will stick in the wake of a significant drop in the benchmark scrap price remains to be seen, market players say.
Supplier and distributor sources told AMM that mill sales representatives appeared to be sticking to the higher quotes for flat-rolled steel products in the days following the announcements, with most hot-rolled band quotes currently ranging from $31.50 to $32 per hundredweight ($630 to $640 per ton). That compares to about $30 per cwt ($600 per ton) or less in the days leading up to the $40-a-ton increase attempts.
"They seem to be holding the line," a Midwest service center source said.
A second Midwest service center source confirmed that most mills appeared to be seeking the higher numbers, noting that he had received two quotes from domestic steelmakers this week that represented the $40-per-ton increases announced last week.
According to mill and consumer sources, last weeks announcements spurred some buying, which might push out lead times and lend support to the increases.
But a significant drop in the benchmark ferrous scrap price could threaten to derail the recent round of steel sheet price hikes, sources said. On Tuesday, AMM lowered its No. 1 busheling price for Chicagoused as the basis for some mills surchargesby $43 per ton (AMM, July 11).
"The fact that scrap is down is very discouraging for the increases," the second distributor said.
"We are seeing some (pushback)" because of the falling scrap market, a mill source confirmed. He noted that customers have bought at the higher levels nonetheless.
Others, however, said they are still holding off from buying as the falling price of scrap input costs could still threaten the sheet price.
"Its really too soon to tell" where flat-rolled tags will stabilize, the first Midwest service center source said.
The July 9 SteelBenchmarker report, released Wednesday, confirmed that steel prices have stopped their fall, but they did not show much sign of a pickup. The price of hot-rolled band was relatively unchanged at $669 per tonne ($607 per short ton) vs. $670 per tonne ($608 per ton) two weeks earlier.
Likewise, cold-rolled coil was little changed at $780 per tonne ($707 per ton), compared with $779 per tonne ($707 per ton) previously.