Steel Market Update Price Momentum Indicator Now at "Higher"
The U.S. and Canadian steel mills have been announcing price increases on Wednesday and Thursday of this week - following the lead of NLMK USA (Beta Steel, Duferco Farrell and Sharon Coatings which are now all part of NLMK USA). Last week, NLMK USA because the first mill to announce a second round of flat rolled price increases. The NLMK increase was $40 per ton.
Since then virtually every mill has followed (we are still waiting for Severstal NA) with either $40 or $50 price increases. In the case of U.S. Steel and ArcelorMittal they published actual base prices to their customers. You can read more about each price increase on other blog post on our website: www.steelmarketupdate.com
Steel buyers are now resigned to paying higher prices for the October spot flat rolled steel needs. Exactly how much is a question which will be answered over the coming days and weeks.
Steel Market Update adjusted our SMU Price Momentum Indicator to “Higher” from “Neutral” earlier today. Our opinion is prices will trend higher on all flat rolled products over the next few weeks. The question really is how much of the announced increases will “stick”?
One of the larger national service centers told us today:
“Nobody likes the increase, check that, our customers don’t like the increase, our inventory just stopped going down in value and our customers are getting orders in for fear of the next increase. Which Mittal just announced.
Automotive is strong, Service Center inventories should be reducing, and the mill cost to produce is increasing, will they collect all of it, we will see, probably not.
You can’t sell from an empty wagon.”
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