Steel Products

Steel Buyers Respond to Price Increase Announcements
Written by Brett Linton
August 16, 2022
On Monday and Tuesday, SMU reached out to numerous steel buyers inquiring about market conditions this week. Sources were asked whether recently announced sheet price increases were sticking, and when they thought hot-rolled coil (HRC) prices might bottom out.
The majority of the responses we received suggest that price increases are either partially sticking or are not holding up at all. The consensus on when prices might bottom out is mixed: roughly half of buyers believe the inflection point for HRC will occur in the next six weeks, the other half think it will be in the fourth quarter. Read on for a deeper look into the data and comments we received.
We want to hear your thoughts, too! Contact Brett@SteelMarketUpdate.com to be included in our market questionnaires.
Price Increase Announcements
The market is split on this question: 41% of those polled as of Tuesday afternoon reported the increases are not sticking at all, 42% of respondents responded that increases are partially sticking, and the remaining 17% said the increases are indeed sticking. Numerous buyers commented that weak demand and high mill capacity are hindering the mills’ ability to collect increases. Comments we received from respondents:
“First round of increases send the message. Second round starts to move the needle.”
“More than anything they have stabilized the HRC market. In CRC and CORE there are still some deals being made.”
“I would not say prices are rising, but a floor does look possible.”
“It is having a market stabilization effect. The right move at an opportune time.”
“Deals are still being cut at the bottom. Pre-increase.”
“It slowed down the steady falling prices.”
HRC Prices Bottoming Out?
SMU asked buyers how long they thought it would be until hot rolled prices bottomed out, and for the reasons supporting their opinions. The majority (86%) foresee a rebound in prices by the end of this year, with half of those suggesting it could be by the end of this quarter. The remainder think that the bottom will occur further down the road, in Q1 of next year or later.
Some comments from buyers:
“Lack of demand and increased domestic capacity.”
“In the short term, I believe the market has bottomed.”
“They may only bottom for a bit and then ultimately be pressed again before the end of the year, depending on what happens with union contracts.”
“Another week or two of moderate adjustments before this market starts an upward climb. Though maintenance production will be controlled forcing mill buys.”
“Historically there is pressure on pricing November/December.”
“End use demand stable and companies will need to restock.”
PSA: We will publish our next SMU Market Trends Report this Friday outlining the full results of our ongoing survey. Premium members can view current and past survey reports here on our website. We encourage readers to explore the full results, as we simply cannot write about all of the information within. After logging in at SteelMarketUpdate.com, visit the Analysis tab and look under the “Survey Results” section for “Latest Survey Results.” Historical survey results are also available in the Survey Results section under “Survey Results History.” We will conduct our next market survey next week. Contact us if you would like to have your company represented.
By Brett Linton, Brett@SteelMarketUpdate.com

Brett Linton
Read more from Brett LintonLatest in Steel Products

US rig count slips, Canada ticks higher
ncreases through September, according to the latest Baker Hughes rig count data.

CRU: EC to toughen steel safeguards
The European Commission proposes cutting its steel import quota by almost half, with volumes exceeding the limit facing 50% duties. The region’s steel industry welcomes the move, while other steel-producing nations fear the consequences. CRU published an insight before this announcement, noting that more restrictive trade policy could significantly raise the cost of marginal supply […]

US and Canadian rig counts stabilize
US counts continue to hover just above historic lows, while Canadian figures remain comparatively healthy.

Plate market sources critique mill hikes amid current market conditions
Following spot market plate price increase notices issued by domestic mills this past week, participants are contemplating the rationale behind the increases and whether they will stick. Some sources anticipate that current market conditions will shift in November and believe the increases may set a new "pricing floor."

Oregon Steel Mills lifts plate prices by $60/ton
Oregon Steel Mills has joined other producers in announcing a price increase of at least $60 per short ton on steel plate.