NEW YORK More domestic steel mills are said to have increased base prices on sheet products in a move sources predict will help bring in buyers off the sidelines.
Portage, Ind.-based NLMK USA is increasing base prices for all steel sheet products by $30 per ton effective immediately, the company told customers in a June 14 letter, citing improved demand and extended lead times.
Pittsburgh-based U.S. Steel Corp. is also reportedly increasing minimum base prices on hot-rolled coil to $630 per ton ($31.50 per hundredweight), at least one customer said he learned by phone from his mill representative. Charlotte, N.C.-based Nucor Corp. made a similar move, sources said, although AMM has not seen official letters from either mill.
Others steelmakers are expected to follow, sources said.
News of the moves comes day after Chicago-based ArcelorMittal USA LLC and West Chester, Ohio-based AK Steel Corp. independently increased their own base prices (amm.com, June 13).
Steel sources have said that this second round of hikes will help solidify the first round of increases, which were announced in late May for around $50 per ton (amm.com, May 23).
Sources noted that lead times at some of the larger mills have lengthened, particularly those tied to a stronger-than-expected automotive industry. In addition, labor issues and planned outages, coupled with steady business activity, could cause extended tightness in the market, they said.
"I think the pump was too dry and needed to be refilled," one Midwest service center source said. "Were replenishing inventory right now, which is at a low level."
Market participants, however, noted that it may be too soon to tell whether prices will stick in the medium and long term. "Theres a definite change in the wind," one southern service center source said. "How sustainable is this? Ill take a very wait-and-see attitude."