NEW YORK Several steel sheet mill representatives have reportedly indicated that another price increase is imminent, some buyers told AMM.
Mill representatives have asked several buyers to place orders ahead of "prices going up," although some have hesitated due to continued squeezed margins.
"We were offered some steel and told that if we want, we should buy it now at todays price because the price is going to go up," a Midwest service center source said. "Im not going to play their game anymore. Our statement will be and has been if we need it, well buy it. If we dont own it, we dont need it."
Speculation of a possible price increase has mounted this week due to higher raw material costs coupled with low inventory levels and extended mill lead times.
"Its not a surprise to anyone that the mills are going to increase pricesthat is unless you have your head in a hole," a second Midwest service center source said. "Its expected, and it looks like with scrap maybe going up $20 to $30 (per ton), the mills are going to push it up, too, and try to get momentum going."
Earlier this week, West Coast steelmakers USS-Posco Industries Inc., Pittsburg, Calif., and California Steel Industries Inc., Fontana, Calif., led what is poised to be a new round of increases by telling customers Nov. 4 that they were raising sheet price by between $40 and $60 per ton ($2 and $3 per hundredweight), a move that surprised many as it is typically Midwest mills that have lead price increases (amm.com, Nov. 4).
However, the move by the two producers fed into heightened market speculation that a new round of price increases for mills east of the Rockies was near.
One southern service center source, though, said it seemed "odd" for mills to raise sheet prices at this time of year because companies typically look to wind down inventory at year-end.
"Certainly, November and December, because of the holidays, will be slower months," he said. "We had a strong October because of an extra billing day, but November has kind of started off slow."