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Severstal pushes steel sheet prices higher

Keywords: Tags  steel prices, Severstal, ArcelorMittal, steel sheet, hot-rolled, cold-rolled, galvanized, catherine ngai

NEW YORK — Severstal North America Inc. has raised minimum base prices for its flat-rolled steel products effective immediately, joining other North American mills in an attempt to hike sheet prices for the third time in five weeks.

The Dearborn, Mich.-based steelmaker has increased its hot-rolled base price to $32.75 per hundredweight ($655 per ton) and cold-rolled coil and hot-dipped galvanized to $37.75 per cwt ($755 per ton), the company said in a June 27 letter to customers. Both prices are up $1.25 per cwt ($25 per ton) from the company’s last pricing announcement in mid-June (, June 17).

In addition to higher spot pricing, Severstal NA also set higher quarterly and six-month buying prices, part of its firm pricing option introduced earlier this month. Under the quarterly option, which covers the July-to-September period, hot-rolled coil will be $33.75 per cwt ($675 per ton) while cold-rolled and galvanized will be $38.75 per cwt ($775 per ton). Six-month pricing from July to December is $2 per cwt higher than the base price for spot material.

The move by Severstal to raise spot and longer-term fixed prices came a day after ArcelorMittal Dofasco Inc. raised base prices by Canadian $20 per ton and ArcelorMittal USA LLC reportedly told customers it also was moving prices up to $32.50 per cwt ($650 per ton) for hot-rolled and $36.50 per cwt ($750 per ton) for cold-rolled (, June 26).

Others mills were expected to follow the move to raise sheet prices, which comes just two weeks after a second round of hikes announced earlier this month (, June 13) and within five weeks of the original increase of the cycle in May (, May 23).

According to market sources, some of those announced increases are starting to take hold, with AMM’s spot price for hot-rolled sheet now at $31.50 per cwt ($630 per ton) f.o.b. mill, up from $30 per cwt ($600 per ton) last week, while cold-rolled edged up to $36.50 per cwt ($730 per ton) from $35 per cwt ($700 per ton).

The stronger pricing and attempts to boost it further come at a time of steady demand and increased supply-side constraints, sources said.

"Things are looking better right now, and it’s about time," said one mill source. "We all knew the change couldn’t have come from the demand side, so it had to come from the supply side. With all these things happening together, it brought the market up."

Contributing to the supply concerns are AK Steel Corp.’s unplanned blast furnace outage in Middletown, Ohio, earlier this week, along with a continued lockout at U.S. Steel Corp.’s Lake Erie Works; Essar Steel Algoma Inc.’s potential labor stoppage; and ArcelorMittal USA’s planned C6 blast furnace outage in Cleveland this fall.

Market participants also have said that mills are reporting a shortage of steel slab as well as a stronger-than-expected automotive sector, causing lead times to extend.

"Lead times are pushing out for sure, and some mills are having issues buying slabs. Overall, the supply-demand ratio is being impacted," a Midwest service center source said.

However, that newfound balance could be rattled as supply disruptions are resolved in coming months, sources said.

"The thing that concerns me is that if ultimate demand doesn’t increase substantially, things will fall apart once we get into September," a Northeast service center source said.

Meanwhile, although imports have not been in the market in recent months due to barrel-scraping domestic pricing, competitive foreign offers have slowly returned, with some citing imported hot-rolled coil in the $30.75- to $31-per-cwt ($615- to $620-per-ton) range.

"At some point, the weakness of the rest of the world has its effect. There are still too many unknowns out there. And with weak economies—China, Southeast Asia, Europe and even Russia—the weakness will start to creep back in over here," a second Midwest service center source said.

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