NEW YORK Upward pricing
in the domestic flat-rolled steel market appears to have
stalled, stirring speculation that a third round of price
increase announcements is on its way, market sources told
"How do you keep the momentum
going?" a source at one southern distributor said. "It swung in
(the mills) favor, but this thing is so fragile."
Multiple mill sources confirmed
to AMM talk of a third round of price increase
announcements. "A price announcement should come soon," one
mill source said Wednesday.
But the exact timing of any
potential increase is still unclear. Some buyers said the
expected increase would not be announced until the last few
mills close their December order books, which could happen as
early as the end of this week or early the next.
Others said the timing of a
sheet price increase likely will hinge on possible movement in
the ferrous scrap market in coming days. If scrap prices rise,
steel mills will have an impetus to raise finished steel
prices, sources said. But as early indications suggest the
scrap market may be poised to move sideways rather than up
amm.com, Nov. 28), that expected
timeline for steel price announcements may be extended, they
"I do think well see (an
increase)," one Midwest distributor source said. "But I
dont know that its imminent."
Meanwhile, a sideways-to-down
scrap market in December could serve to erode steel pricing
support. "Early indications were that scrap would be up, but
now thats faded. That obviously doesnt support an
increase," a second Midwest service center source said.
At the same time, any move to
increase prices on flat-rolled steel ahead of the December
scrap market settlement could encourage scrap brokers to raise
prices and in turn force input costs for mini-mills higher, a
second mill source said. Such a dynamic would "force the other
mills to support the increase you announce."
Still, many market sources
agreed that the question is if, not when, domestic mills will
introduce a third fourth-quarter price increase.
"If you look at the results of
the mills, theyre horrible," the second mill source said,
noting that steelmakers are looking to boost their profit
Market sources have told
AMM that a portion of the combined $90-per-ton
increases already announced in October and November have been
collected, but upward momentum has stalled as spot buyers see
little need to order ahead of their January needs, especially
since some domestic mills still have room in their December
"Every ounce of me thinks things
are flat," the second Midwest service center source said.
SteelBenchmarkers Nov. 26
report, released Wednesday, pegged U.S. hot-rolled band at $693
per tonne ($628 per net ton), up 1.9 percent from $680 per
tonne ($617 per net ton) two weeks earlier but still well below
the prices mills have been targeting with the full $90-per-ton
increase. Cold-rolled coil logged a similar increase, rising
1.6 percent over the past two weeks to $808 per tonne ($733 per
A price increase announcement
could provide a boost to pricing as business often stagnates in
the final weeks of the year, a third Midwest service center
source said. "Theyll just keep trying to inch the floor
up," he said.
"Theyre just buying time
to some degree, because they want to get into that January
timeframe, when theres a normal uptick in business and
demand. Theyre trying to hold the thing up until then,"
the second distributor source said.