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Steel sheet mart unsure price hike will succeed

Keywords: Tags  steel sheet, hot-rolled, cold-rolled, coated, ArcelorMittal, Severstal, NLMK, U.S. Steel catherine ngai


NEW YORK — At least four steelmakers have raised prices on flat-rolled sheet products, but market participants are mixed about the viability of the increase.

Chicago-based ArcelorMittal USA LLC appeared to lead the move March 17 by pushing minimum prices on hot-rolled coil to $33 per hundredweight ($660 per ton) and cold-rolled and coated products to $39.50 per cwt ($790 per ton), market sources confirmed. The move was followed by Severstal North America Inc., Dearborn, Mich., for spot inquiries, citing increasing natural gas prices, rising ferrous scrap costs and longer lead times, sources said (amm.com, March 17).

A day later, Portage, Ind.-based NLMK USA LLC told customers it was raising its minimum base prices to $33 per cwt on hot-rolled coil and $39.50 per cwt on cold-rolled and coated products effective immediately, while Pittsburgh-based U.S. Steel Corp. increased its minimum prices on all spot orders by $2 per cwt ($40 per ton) (amm.com, March 18).

The moves mark the first price increase for steel sheet since the end of last year. Since the beginning of 2014, tags have been either moving sideways or falling, which caused hesitancy in the marketplace.

But buyers contacted by AMM seemed mixed about the most recent price move. Some claimed it came "too early," while others said it was expected because of an earlier predicted bottom.

"It’s not the right timing," a West Coast buyer said. "It’ll be interesting to see if this sticks. But inventories are high and I don’t think people are ready to buy."

A southern buyer indicated that lead times for certain mills have pushed out slightly, although cold-rolled and coated product lead times are much healthier than hot-rolled. "I’m hoping things will stick," he said.

Raw material costs will be a factor, other sources said, although it was uncertain which direction the market will move in April. Others said that weather could greatly affect the viability of a price increase, especially if continued cold weather mutes pent-up demand in the spring.

Those along the East Coast, Gulf Coast and West Coast were concerned about imports, particularly because the price increase comes at a time when the market expects the majority of foreign imports bought last year to hit U.S. shores. They said the import factor, and buyers who took advantage of it last year, will deter the higher pricing.

"We were definitely near the bottom. The problem right now is that there are too many mills offering foreign steel," an East Coast service center source said. "Business has been great, but we’re seeing a lot of inventory hitting (U.S.) shores all at once."


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