Initial market reaction to the NLMK USA $40 per ton ($2.00/cwt) price increase announcement has been muted at best. The vast majority of steel buyers with whom we spoke on Friday and over the weekend had little to no reaction to the news. Not one buyer told SMU would the announcement adjust their purchasing plans and may buyers would rather speak about the “deals” being offered into the marketplace which were well below the original $60 per ton announcements which began on August 10, 2011.

As of late Friday Steel Market Update was not aware of any other domestic mill following the NLMK USA lead.

One of our sources called the move “suicidal” as the domestic mills continue to have too much supply in the marketplace and other mills will pounce on the NLMK customer base if they truly intend to attempt to collect both price increases which total $100 per ton.

A flat rolled steel buyer told us over the weekend, “NLMK is doing what they feel is best for their business…and you can’t blame them. I don’t think it will stick, but you can’t blame them.”

The same buyer went on to say, “No other mill announcements. Every mill is talking about it…pointing at someone else as the one who could start it (now NLMK). We will fight the increase as hard as we can. Because the odds of us passing it through in the 4Q are slim to none.”

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