Steel Products Prices North America

Murky Market for Some, Others Are Sure Prices Will Go Higher

November 7, 2017

A couple of weeks ago, ArcelorMittal USA announced price increases taking flat rolled steel base prices on hot rolled to $625 per ton and $41.25/cwt base on cold rolled and galvanized. We have yet to see spot prices out of the domestic steel mills reach the prices suggested by AMUSA. The rest of the industry asked for prices to rise by $40 per ton, which would put prices in the $38.50/cwt-$40.50/cwt area. Many steel buyers are telling Steel Market Update (SMU) that pre-increase pricing is still available, especially on cold rolled and coated products.

SMU has seen a bottom taking hold on flat rolled products and a push by some of the mills to move the upper end of the range at least $20 per ton, if not the full $40.

The CEO of a large pipe and tube company is certain that prices will go higher from here. A couple of weeks ago, we were told to expect $700 hot rolled by March. This week, the same CEO told us that prices were “firm and will go up soon.”

When asked where he was seeing prices out of the domestic mills this week, a service center purchasing manager from the East Coast told SMU, “Too hard to say today. Some mills are still accepting pre-increase pricing. I am milking out my contracts and not placing spot yet, so I have not hit the wall. New prices seem to be slow to stick. Best way to solve that is another increase.”

A large service center told us, “It’s a bit murky out there, with reported lead times moving out and scrap pricing weak. Mills will quietly admit that at least half, if not more, of the lead-time moves were anticipated because of planned outages, but it’s playing like it’s due to increased activity. Activity at the mills is up post price increase, but the level is hard to determine at the moment. Mills are moving to try and take command of the market, so an additional increase is likely to occur to help that effort along.”

Most of the steel buyers told Steel Market Update that a new price announcement (increase) will be coming as soon as lead times move into the New Year.

A Chicago-based service center told us, “Mills are not firm yet. Market timers hit the mills over the last three weeks. The next 2-3 weeks will tell the tale.”

Plate Market Increase “Still Has Wet Ink”

“Plate had a price announcement last Friday, up $40/ton led by Nucor. SSAB followed Monday, Mittal followed today. That would put the delivered number at $33.50/cwt-$34.50/cwt depending on the buyer category. Only a few large buyers would be $33.50 if this holds,” one plate service center told SMU.

“Mills are not quoting business for delivery in 2018, only stuff to ship this year. That is a clear signal that they are waiting for a seasonal scrap increase and hoping to make another announcement before they open their January book. It’s too early to call on the firmness of this announcement,” he added. “Clearly, mills sense that SC plate inventories are ‘lowish and dropping,’ but shipping rates on plate have not been great. We won’t know that for a couple weeks. Everybody’s firm right now, but the increase still has wet ink.”

A second plate distributor provided the following comment about the plate market: “Wipe your backside with the $40 announcement, demand is horrible.”