NEW YORK AK Steel Corp.
has announced plans to raise base prices for all carbon
flat-rolled steel products by $40 per ton ($2 per
hundredweight), the first domestic steelmaker to hike published
prices in the new year but leaving some buyers skeptical as to
whether the attempted increase would hold.
The West Chester, Ohio-based
steelmakers increase, announced Jan. 21 and effective
amm.com, Jan. 22), followed weeks of speculation
that a sheet increase was in the works.
AK Steel did not give a reason
for the move in announcing the hike, but market participants
speculated that it was looking to stymie a recent softening in
domestic sheet prices amid sluggish demand from many end-use
amm.com, Jan. 16).
"I think the mills will all
follow suit. At the levels before, the mills were selling at
cost or at least really close to it," one mill source said. "I
think with everything going on around the worldiron ore
up, scrap up, etc.it seems to me that now is the time for
the U.S. to move prices up."
Buyers last week reported
average hot-rolled coil purchases at $620 per ton ($31 per cwt)
f.o.b. Midwest mill, with some citing discounts for larger
volumes, down from early January prices of around $630 per ton
($31.50 per cwt).
"I dont think its a
bad time to put a price increase out there because its a
signal of how mills arent making any money," the
mill source said. "Everyone is just waking up now."
While AMM was not aware
of other pricing announcements as of late afternoon Jan. 22,
market participants agreed that other mills would need to jump
on board for the increase to take hold.
"In theory, the mills have the
same desire to get their prices up. I would hope that most
people want to see the price go up," a buyer said.
But while market players said
the move made sense as mills try to boost their margins, some
players are doubtful the increase will stick, given lackluster
demand and short lead times.
"The price hike is wishful
thinking. Maybe its their indication that they dont
want to go lower than what they have. All the mills right now
are looking for orders, so were on a slippery slope," a
second buyer said. "Things are so volatile right now. Its
the wild, wild West out there."
The first buyer agreed. "At the
end of the day, if lead times dont push up and order
books dont get filled, it will be impossible to implement
the increase. Its a little lackluster out there and the
mills have a lot of challenges. Well see how this thing
On the import side, traders said
the price hike would probably do little to encourage
"Theres not much available
offshore right now. Prices from Europe have been going up a
bit. And comparing domestic prices, theres not enough
price differential to demand and justify imports right now,"
one trader said. I dont think itll do very
much for us, but its good for the market overall."