Nucor, ArcelorMittal USA Announce $40 Increases on Flat Rolled

We also understand that ArcelorMittal USA began notifying customers verbally this afternoon of their intention to raise prices by an identical $40 per ton.

The following is an article we were working on throughout the day as we anticipated the increases being announced:

Flat rolled steel mills have been warning their customers of a pending price increase on flat rolled products. The expectation is that an increase could come as soon as the close of business today (Thursday) or tomorrow. The number being floated is $40 per ton.

The rumor mill has Nucor announcing an increase both on plate and flat rolled. Nucor did announce a plate increase late this afternoon, and our expectation is they will announce flat rolled soon [which they did this evening].

Scrap prices are up approximately $20 per gross ton across the board for the month of November. This will help the psychology of the market accept another increase – or at least allow the mills to collect the balance of the first $40 announced a couple of weeks ago.

SMU is hearing the mills have been able to collect at least a portion of the $40 per ton increase announced in late October. We have seen prices rising as both the bottom and upper regions of our price range on most flat rolled products have increased since the first price hike was announced.

Our channel checks with service centers conducted throughout the day today found most believing the steel mills would raise prices very soon.

We discussed mill lead times on flat rolled and heard from one large service center general manager who told us, “At the moment, they appear to be extending, and truthfully, I believe this is mostly due to mills getting all of the recent spot orders into their systems and then updating their systems. It will take another couple of weeks to get a firmer handle on whether momentum is building or not. We expect another increase to be announced imminently, and whether that serves to generate another round of large spot purchases or not is TBD. I think the last round of spot orders will likely have allowed buyers to cover multiple months, and therefore they may not need to come in for more just now. For contract customers, it may cause mills to reach further out and require customers to get those tons in sooner than normal. If need be, the mills can frontload contract tons in an attempt to keep lead times longer/moving out, to create more urgency for the spot buyers.”

Lead times are in January at most of the flat rolled mills on all products (HR, CR, GI and AZ). A week ago, SMU spoke with the head of commercial for one flat rolled mill who said they had sold out their book for the balance of the year on all flat rolled products. We were told, “I feel good about +$1.00/cwt, but I’m gonna sit and watch for a couple of weeks since we have nothing left to sell.”

It is just a matter of time….