NEW YORK North
American steel mills have kicked off a third round of
flat-rolled price hikes as extended lead times, labor and
production outages as well as low inventory levels give the
market some upward support.
Ontario-based ArcelorMittal Dofasco Inc. has raised base prices
on its steel sheet products for all new spot orders by Canadian
$20 ($19.10) per net ton effective immediately, citing
devaluation of the Canadian dollar, according to an internal
memo dated June 25.
Customer sources told
AMM that its U.S. counterpart, ArcelorMittal USA LLC,
also has been informing customers of higher prices, with its
hot-rolled coil now at $32.50 per hundredweight ($650 per ton)
and cold-rolled and galvanized product at $37.50 per cwt ($750
per ton), although AMM has not seen an official
announcement from the Chicago-based steelmaker.
Other mills were
widely expected to follow the move, which comes just two weeks
after a second round of hikes announced earlier this month (
amm.com, June 13) and within five weeks of the
original increase of the cycle in May (
amm.com, May 23).
Rumors that a third
round of increases was in the works have been circulating for
more than a week, but speculation heated up earlier this week
when West Chester, Ohio-based AK Steel Corp. was forced to
temporarily idle its blast furnace in Middletown, Ohio, after
an unexpected mechanical failure (
amm.com, June 24).
outage, coupled with the continued lockout at U.S. Steel
Corp.s Lake Erie Works, Essar Algomas potential
labor stoppage at the end of July (
amm.com, June 20) and ArcelorMittal USAs
planned C6 blast furnace outage in Cleveland in the fall (
amm.com, June 19), has given the sheet market some
strong fundamental support, sources said.
Add that to a
stronger-than-expected automotive sector and low inventory
levels at service centers, and market participants are
expecting strength in domestic sheet pricing to continue
through the traditionally slower summer season.
"Things are going to
be different this summer," Charles Bradford of New York-based
Bradford Research Inc. told AMM. "Keep in mind the
reason for the slowdown was usually the automotive companies
taking off a few weeks. But theyve already announced that
theyll take less time off this year because automotive is
Bradford added that
with the July scrap outlook leaning toward the upside (
amm.com, June 26), mills may find even more
support as they look to push through increases.
"Things are tightening
up for sure," a Midwest service center source said. "Before,
hikes were to establish a floor. This time around, its
supply based. The mills have been very strict on pricing, with
quotes good only for that day. No one has cracked."
SteelBenchmarkers latest report, released June 26,
confirmed the higher pricing, with U.S. hot-rolled band rising
2.5 percent to $668 per tonne ($606 per ton) from $652 per
tonne ($592 per ton) two weeks earlier, and cold-rolled coil up
1.8 percent to $779 per tonne ($707 per ton) from $765 per
tonne ($694 per ton) in the same comparison.
Others point out,
however, that with imports set to hit U.S. shores later this
summer and early fall, the upward momentum could be
"The mills dont
care about imports. Their mentality right now is: Too
bad, so sad, well get it while we can," said
another Midwest service center source. "If the momentum shifts,
prices will be hammered down again. My feeling is that the
mills will keep pushing it as far as they can."