Final Thoughts
Final Thoughts
Written by John Packard
November 8, 2019
The domestic steel mills announced new $40 per ton ($2.00/cwt) price increases on flat rolled this past week. This is the second price increase on flat rolled over the past two months. The domestic mills, led by ArcelorMittal USA, announced $40 per ton spot base price increases on Oct. 24-25 and were able to collect some of that increase prior to the latest move.
The domestic flat rolled mills have tried to pump up spot prices on a few occasions over this calendar year. In January, the mills went out during the last week of the month with $40 per ton, and then followed it up four weeks later with another $40. These increases only caught hold for a short period of time before prices began moving lower again (dead cat bounce).
On the 24th and 25th of June, the mills tried to shift momentum and began with new $40 per ton price increases. Two weeks later they announced an additional $40 per ton, and then two weeks after the second increase they announced a third $40 per ton. As with the January/February increases, the uptick in pricing was short-lived (another dead cat bounce).
It is not yet known if the latest round of price increases will indeed stick and continue to move higher with lead times already into January. At this time, Steel Market Update’s Price Momentum Indicator is pointing toward higher spot prices over the next 30 days.
Plate also saw a $40 per ton price hike by Nucor last week. The domestic mills have been “toying” with plate pricing, but don’t seem to have found a united formula. Evraz announced higher plate prices on Oct. 28 and no other mill immediately followed. We have adjusted the SMU Price Momentum Indicator to Neutral on plate to see if the mills will present a united front and hold for higher prices.
We still have room in our next Steel 101: Introduction to Steel Making & Market Fundamentals Workshop. The workshop will be held in Ontario, Calif., and will include a tour of the California Steel Industries steel mill. You can find more details on our website: www.SteelMarketUpdate.com/Events/Steel101. You are also welcome to reach out to Events@SteelMarketUpdate.com and our events team can arrange registration, invoice you or answer questions you might have.
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John Packard, President & CEO
John Packard
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