Steel Mills Pulling Offers & Raising Steel Prices

US Steel’s loss is someone else’s gain and the other domestic mills are reacting as offers have been suspended and new flat rolled steel prices are being announced.

The Nucor Sheet Mill Group came out with a price announcement this morning (Friday, April 04, 2014) taking base prices from the $33.00/cwt ($660 per ton) minimum up to $34.25/cwt ($685 per ton) on benchmark hot rolled coil. This equates to a $25 per ton price increase. Cold rolled and coated also rose by a like amount with the new minimum being asked at $40.75/cwt ($815 per ton) plus extras.

NLMK USA responded this afternoon by announcing that they are taking prices up $30 per ton and we have learned that other mills have pulled their open quotes and are mulling over where prices need to go from here.

One mill commercial officer told SMU they were already asking for the new numbers even though they had not yet made a price announcement.

A conversion mill told SMU this morning that they needed to see base prices on coated over $40.00/cwt just to break even on their new substrate costs.

Adding fuel to the fire, we are seeing ferrous scrap prices rising this week as the domestic steel mills conclude their negotiations with their scrap suppliers. We are seeing scrap prices rise by as much as $30 per gross ton in the Ohio Valley to as little as $10 per gross ton in Detroit. The bottom line for the steel mills is their cost for scrap just went up.

Add to this lead times which are extending (as we reported in an article in Thursday evening’s edition of SMU) and buyers need to be vigilant, keeping a close eye on your suppliers, shipments and lead times. Prices, we can only assume, will continue to rise from here based on supply issues.

If demand kicks in at ever higher levels – well, we could be in for a long, hot summer…