Price Increases Take Base Prices to What Levels?

Spot market pricing on cold rolled and coated have risen close to the levels suggested by AK Steel in their series of announcements. However, hot rolled has not been able to keep pace as can be seen by the various indices available. The SMU hot rolled index average for this past week is $410 per ton, still below the initial price level suggested by AK Steel back in December.

Right now, with no mill providing specific base price guidance, steel buyers are struggling to figure out what the bottom of the range is going to be. On hot rolled we have heard numbers as low as $21.00/cwt ($19.50 + $1.50 = $21.00/cwt) or $420 per ton. Our best guess is most customers have been paying $400-$420 per ton which would put HRC at $430-$450 per ton ($21.50/cwt-$22.50/cwt) but we have heard numbers some buyers expecting HRC prices to be as high as $460 per ton (thus the confusion in the market).

Cold rolled and coated prices are perhaps a little easier to figure out as the lower end has been approximately $28.00/cwt to as high as $29.50/cwt (plus extras). This would put base prices in the $29.50/cwt to $31.00/cwt range (much closer to what AK Steel suggested based on their announcements over the past few months).

We did speak to one conversion mill late last week who told us that their mill would be asking $29.50/cwt base pricing on galvanized spot orders.

We expect that the market will provide more guidance early this week as SDI opens their order book for Butler and more customers begin asking for specific quotes on business they need to place. We will see if the latest round of increases has any immediate impact on the indexes when we release our pricing on Tuesday evening.