Steel Mills
Key Price Driver for October: Solidarity
Written by John Packard
November 4, 2013
For the past couple of months Steel Market Update (SMU) has been writing about how supply constraints have helped keep flat rolled steel prices level to slightly rising. With the round of price increase announcements made at the beginning of the month of October, we have seen a new found resolve by almost all of the domestic mills to hold the line and collect higher prices.
This may be the result of new management at Severstal NA and at the top of U.S. Steel. The marching orders appear to have been well spelled out and as the month progressed spot prices did indeed rise.
One other reason why the mills are resolute in collecting higher spot prices is we are in the midst of contract negotiations. What makes this year unusual is with but one exception (ThyssenKrupp), all of the mills are insisting on changes to the way contracts have been negotiated over the past few years. The mills no longer want to accept CRU “minus” contracts and are looking to replace them with either firm quarterly or semi-annual contracts or, contracts which start at “spot” numbers (be it CRU or Platts) and any discounts are to be done in the form of a modest rebate provided tonnage and release requirements are met by the customer.
As the month of October ended we found a large number of contract negotiations continuing with one of the conversion mills admitting to SMU that they had not yet closed a single contract.
John Packard
Read more from John PackardLatest in Steel Mills
Nippon could up investment in USS facilities to $7B: Report
It's the latest twist as the proxy battle heats up for Pittsburgh-based U.S. Steel.
Hybar expansion still on the table as Arkansas mill startup nears
As Hybar nears the completion of its $700-million rebar mill in Arkansas, the company said it is still “actively considering” building other steel facilities in the southern US.
Global steel production edges lower in February
February’s global raw steel output is tied with last December's for the fourth-lowest monthly production rate recorded over the past two years.
Fate of U.S. Steel hangs in the balance
The future of U.S. Steel remains unclear, but the proxy fight for control of the company is heating up. Shareholders will cast their votes on the company's future at the annual meeting in May.
Cliffs to idle Dearborn blast furnace, restart Cleveland furnace by July
Cleveland-Cliffs has decided to idle the steelmaking operations at its Dearborn Works in Michigan due to weak automotive demand.