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Steelmakers boost sheet prices amid supply fears

Keywords: Tags  steel sheet, steel sheet prices, Nucor, NLMK USA, hot-rolled, cold-rolled, galvanized, Great Lakes Works Gary Works

NEW YORK — At least three U.S. steelmakers have officially published higher prices due to a number of recent disruptions on the supply side as some in the market expressed concern over an increasingly "tight" marketplace.

Nucor Corp. was the first to increase prices on its steel sheet products. Hot-rolled coil was set at $34.25 per hundredweight ($685 per ton) and cold-rolled and galvanized products at $40.75 per cwt ($815 per ton), effective immediately, the Charlotte, N.C.-based steelmaker said in an April 4 letter to customers (, April 4).

The prices are $1.25-per-cwt ($25-per-ton) higher than previously announced prices of $33 per cwt ($660 per ton) for hot-rolled coil and $39.50 per cwt ($790 per ton) for cold-rolled and galvanized products (, March 17).

Portage, Ind.-based NLMK USA LLC told customers April 4 that it had increased its sheet products by $1.50 per cwt ($30 per ton), effective immediately.

Severstal North America Inc., Dearborn, Mich., also prices by the same amount as Nucor, it said in a letter to customers April 4, citing "unforeseen and unfortunate events" that caused "a dramatic influx of orders for steel from our two mills."

Other steelmakers were said to be following the price move, with some producers already pushing higher numbers on immediate quotes, sources said.

Some market participants were concerned with how quickly the sheet market has tightened recently, with several buyers indicating that at least three electric-arc furnace producers had just their closed order books—or were on the verge of doing so—for May. Others noted that two integrated producers serving the Midwest were "very late" on orders, causing difficulty for some securing product.

"I feel very strongly that there will be a shortage," one Midwest service center source said. "The mills are out until June and I’m very worried."

The response was partially due to changes on the supply side in the past two weeks. U.S. Steel Corp. was forced to temporarily idle a basic oxygen process shop at its Great Lakes Works in Ecorse, Mich., late last month after a roof collapsed (, March 28). A few days later, the Pittsburgh-based steelmaker said it was temporarily curtailing its blast furnaces and steelmaking operations at its Gary Works in northwest Indiana due to ice conditions on the Great Lakes, which sources said was a problem for other integrated producers in the region as well (, April 3).

But the pains of a tight market do not seem to be felt in other parts of the United States. Some buyers on both coasts said they were waiting for imported material in coming weeks, and the higher domestic prices will just open up another opportunity for imports.

"I think the price hikes are a short-sided message, and this is all Midwest-based," one East Coast service center source said. "For the higher pricing, you’re only forced to pay it when you need steel and we’re certainly not buying any of it. I’m just going to sit back and watch what happens. We have plenty of cold-rolled where we are and we can ride this out for a good amount of time."

But much of the tightness in the Midwest might be due to carriers catching up on shipments after several weeks of cold weather caused disruptions in transportation.

Once the mill issues return to normal and other problems—including weather—are settled, the tightness might not last long, a second Midwest service center source noted.

"The weather problem has been here for too long," he said. "The snow hasn’t been melting fully and every mill I buy from is late. The ripple effect is going down the supply chain, to coaters, re-rollers—everyone who is getting substrate from a mill. Transportation is a nightmare. But I think it’ll all settle and find a calm level soon."

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