Steel Mills

ArcelorMittal Opens August Order Book with Base Price Reminder

Written by John Packard

Late this afternoon an ArcelorMittal USA customer advised us that AM had opened their August order book. They received a note from the mill which included the following comments:

Current demand for light flat rolled products has extended our lead times at all of our Northern producing locations. July order acceptance is now closed for any new hot rolled, cold rolled or coated business from our Burns Harbor, Cleveland, Indiana Harbor, New Carlisle and Riverdale facilities. Our books are now open to accept new orders to be produced and delivered in August from these locations.

The note went on to reference “minimum base prices” that are being accepted on new orders would be:

Hot Rolled = $34.00/cwt or $680 per ton

Cold Rolled = $40.50/cwt or $810 per ton

HD Galvanized = $40.50/cwt or $810 per ton

As many of you already know, the last public announcements from the domestic mills called for hot rolled base pricing to be $685 to $700 per ton. However, over the past month there has been approximately $15 per ton in erosion in the SMU average and $20 per ton in the lower end of the range.

When we did our channel checks this afternoon we found a number of mills who have taken spot hot rolled base prices down to the $650 per ton level for decent sized orders. As one service center executive with whom we spoke late this afternoon, “The mills are becoming more competitive.”

The discussion then centered on the ArcelorMittal and the number of tons that the mill lost of production at both Cleveland and Indiana Harbor due to furnace outages. Even with the outages we were reminded that AM is but one mill and that the market is a competitive one and likely to get more competitive in the coming weeks.

When talking about prices and specific mills he told us, “Given the right set of circumstances every one of them would do it [less than $650 hot rolled].”

“The mills,” he told us, “are complaining that there are some who are talking the market down. This is something that works both ways. Mills talk the prices up when circumstances are in their favor.”

He went on to say, “Price levels are weakening for sure.”




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