NEW YORK At
least two major domestic steel mills have increased published
sheet prices in a move that market players expect will gain
ArcelorMittal USA LLC,
Chicago, on June 13 announced new minimum base prices of $630
per ton ($31.50 per hundredweight) for hot-rolled coil and $730
per ton ($36.50 per cwt) for cold-rolled and galvanized product
effective immediately, according to a letter to customers. The
company didnt list its previous price in the letter, but
AMMs current spot price for hot-rolled sheet is
$595 per ton ($29.75 per cwt) vs. reported lows of around $550
per ton ($27.50 per cwt) in May.
AK Steel Corp, West
Chester, Ohio, also announced a minimum $40-per-ton
increase in all spot market carbon flat-rolled steel base
prices effective immediately with all new orders.
Other mills were
widely expected to mirror the move, which comes just three
weeks after a first round of price hikes announced in late May
amm.com, May 23).
There have been rumors
for several weeks that domestic mills would attempt a second
round of increases. While much of that first hike reportedly
gained momentum, bringing some buyers off the sidelines in an
effort to replenish low inventory levels, this second hike is
expected to gain further tractionor at least help
solidify the previous hike, buyer and mill sources said.
"Believe it or not,
this is a good move on the mills part. For the last
increase, the mills got some momentum and got the ball rolling
to take some guys off the fence," one Midwest service center
source said. "People were sitting out and saying they could
wait. But with another round, its even going to move more
folks off the fence."
A number of sheet
buyers pointed out that business conditions have remained
stable or even seen a slight uptick, which is helping to
sustain the higher pricing levels.
"Auto is ramping up
and not down. We have lower inventories than weve ever
had. There are some production issues going on at different
mills. All of this is indicating that prices will go up," a
second Midwest service center source said.
Others, though, said
that while an uptick is plausible, the window for higher prices
might be a narrow one.
"I think the mills
will get those higher prices in the next 60- to 90-day window,
but I wouldnt get too excited about it," one service
center source in the South said. "Theres a little
tightness in the market, but its based on a bunch of
circumstances. I dont 100 percent believe that were
in a sustained rally."
They added that with
higher domestic prices, that might be enough to entice imported
steel to re-enter the market at higher volumes, which would
effectively drive domestic prices lower.
"At the end of the
day, the question is will this stick? Sure, it can for a
certain period of time. But it cant stick for long as
long as the price theyre asking for is higher than world
prices," a third Midwest service center source said.