NEW YORK — Buyers of flat-rolled steel are waiting for the dust to settle on last week’s price increases before placing new orders, according to sources. But while the jury is still out on the effectiveness of the hikes, discounts are now nowhere to be found.

While mills have quoted prices below the levels sought with last week’s hikes, they haven’t offered any discounts, market participants said.

A number of mills—led by West Chester, Ohio-based AK Steel Corp.—last week raised prices some $40 to $50 per ton ($2 to $2.50 per hundredweight) effective immediately (amm.com, Jan. 24). But buyers had said previously that increases were unlikely to stick as lackluster demand and short lead times put downward pressure on steel prices.

"The mills aren’t talking like the military and saying, ‘Hey, this is the new price.’ Instead, they’re saying, ‘What do you need? We want to get some higher prices, but if $40 doesn’t work for you, we can negotiate,’ " one Midwest service center source said. "I feel like I’m waiting for the dust to settle right now on prices, and I don’t really need steel badly anyway."

Demand has increased a bit in the past week due to incrementally better sales in the automotive and energy sectors, market participants said, although they noted that construction continues to lag, preventing a truly meaningful pickup. As a result, few purchases have been reported.

"On the demand side, things have been incrementally better ... but we still need construction to turn around," a second Midwest service center source said. "There is too much supply. I think things will stick a little bit, but people haven’t bought anything. They aren’t going to buy anything of significance for a while."

Buyers contacted by AMM offered mixed assessments on pricing, although they did agree that this week’s quotes had not moved any lower than last week’s. Market participants also said that the road ahead looks like an uncertain one.

"All that’s happened so far is that prices haven’t gone down. We haven’t heard of anyone who saw prices go up, though," a third Midwest service center source said. "Things are OK right now. Things were a little slower in January, and I don’t think that bodes well for what to expect in February or March. We’re still seeing a little strength out there, and we’re still lean on inventory."

Looking forward, some said that as inventories grow leaner the time to buy might finally be arriving.

"I think we hit the bottom last week and people will now need to buy. I think prices will have to go up, if slightly," an East Coast service center source said. "My customers and my competitors’ customers are coming off the sidelines and beginning to buy. They have no choice."

SteelBenchmarker’s latest report, released Jan. 30 but dated two days earlier, pegged U.S. hot-rolled band at $688 per tonne, down 0.1 percent from $689 per tonne two weeks earlier. Cold-rolled coil was put at $796 per tonne, down 1.1 percent from $805 per tonne in the same comparison.