Steel Products Prices North America

Steel Buyers React to Flat Rolled Price Announcements

Written by John Packard

As the domestic steel mills started raising flat rolled prices on Wednesday, Steel Market Update reached out to a number of steel buyers in order to get their reaction to the news. We discussed the $40 per ton increases announced by Nucor, NLMK USA, U.S. Steel, California Steel and USS/POSCO along with ArcelorMittal USA’s new base pricing. We also discussed lead times, and this is what we heard:

“I believe we have turned the corner and we’ll move upwards. Yes, the numbers will move up to AM’s prices, +/-$10. Imports have been relatively flat, but HRC is moving up and CR/GI seem to be stable. I expect the next go around to be up.” Service center

“I’m not surprised by the latest announcement, but will be surprised if it actually gets the HR base up to $730/ton. I think this announcement was made to firm up the January announcement, which only got $20/ton at best. I think the market will settle in around $710 to $720/ton. The buyers are buying now out of necessity, but don’t appear to be in a panic mode. Lead times did not jump out with the last increases, and I don’t think they will jump several weeks with this announcement. Scrap may go up in March, but not much. I also think there is some concern about a slowdown in the second half of the year, and buyers will be uncomfortable about buying too heavy of inventory.” End user

directions“I think there may be a bit of ‘fudging’ in lead-time reports, but I don’t necessarily blame the mills. They’re trying to drum up a narrative. I personally think that I’d hold it at neutral until we see what occurs following the second increase. If things are indeed changing, we’ll see a convergence of extended lead-times out into April soon. If not, then it makes the likelihood much less.” Service center

“CSI had followed Nucor with $40/ton price announcement for April ship date. It appears that deals were being made last week at really low numbers for substantial quantity to push out mill lead times. Mill lead time is definitely moving out. Last week we were able to finalize steel buys with a $650 hot rolled coil base price. This week the mills are quoting $680 to $700. Today, AM is advising us their base is $730. I think the market will accept $700 but I’m not sure about $730, given the uncertainties of the Section 232 tariffs, USMCA not being ratified, Section 301 trade talks, and the DOC report to the president on auto imports. Will Tariff Man invoke tariffs on auto and/or auto parts within the next 90 days? Hopefully we will learn more in the coming days.“  End user

“I think prices will rise. Import numbers are just not attractive, and the large deals done have pushed lead times out. Most are into April now for HR, I am told. There are still spot tons as most mills did way less contract this year. I finalized a $33/cwt and $33.50/cwt import deal yesterday from two different mills. A little risky for May/June arrival, but I’m worried about the tons I need heading into summer. I feel like for the next few months we will see a gradual increase, but not above $775/ton. I think $760/ton is more likely. The wildcard is the Mexico and Canada tariffs. If they go away, I don’t think domestic mills can continue to raise prices.” End user

“Yes, prices will rise and will hit the AM levels in three months, supported by strength in foreign price indices and strength in scrap.” Service center

“I’m thinking they have turned it around. Getting $730 should be easy. Nobody is booking foreign orders right now and the flow is going domestically.” Service center

“Yes, at this point, I do think the mills have some momentum. While we do not think they are capturing the full extent of the recent two rounds of increases, we are seeing slightly higher numbers across the board.  I do NOT think spot will be able to hit $730 near term, however. My personal feel is pricing may plateau for the near term between $700-$720. I think we’ll get there in around 1-2 weeks. One challenge I see is, at least one slab re-roller still had very competitive prices in the market earlier this week. It still seems to me there is ample supply of slab, as well as available HRC capacity in the market. That is why I think any emerging price rally may be muted.” Service center

“I don’t know if the market is strong enough to get to the AM numbers. Southern mill coated order books are very strong. Now the mills are saying ‘get your orders in, get your orders in.’” Service center

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