Final Thoughts

And other steelmakers, tube producers, and service centers have raised prices as well. As far as mills go, publicly in the case of Nucor – albeit by a lesser amount (more on that in a moment). And quietly in the case of other producers.

Sheet prices up

SMU’s hot-rolled coil price now stands at $820 per short ton (st) on average, up $15/st from last week. So, the jury is still out on NLMK’s $50/st price hike on hot-rolled and cold-rolled.

It might be an even more tentative proposition when it comes to galvanized product. SMU’s base price is at $930/st on average, up just $5/st from last week. And I’ve spoken to some market participants who said they would be relieved to see galv flat after declines stretching back to late June.

So why is NLMK USA trying to increase galv by $100/st when they’re up $50/st on HR and CR? The answer is relatively straightforward. The spread between HR and galv base is $110/st – one of the lowest points it’s been in recent years, according to SMU pricing records.

That’s no fun if you’re a converter. Or if you’re a mill that sells a lot of galv and that relies, in part, on imported slabs – which face a 50% tariff (in addition to freight costs). So, while galv might not be up much this week, I can see why producers have some real incentives to stick to their guns on hiking prices.

Momentum up too

SMU has also adjusted its sheet momentum indicators to higher from neutral. We haven’t been at higher since June, following President Trump’s doubling of Section 232 tariffs to 50%.

We adjusted momentum from neutral to higher this week not only because of mill price hikes but also because we’ve seen prices flatten out and begin to trend higher over the last few weeks. For much of that time, I’d been writing that it was less a case of prices increasing than of there being less discounting in the market.

What changed this week? We’re seeing more outright price increases. Meanwhile, there is probably a continued supply squeeze with 50% Section 232 tariffs still largely in place.

As we’ve noted before, certain US mills are more aggressively exporting to Mexico. Meanwhile, other US mills are benefiting from OEMs shifting sourcing away from Canadian mills to US ones.

I wish I had import/export data to put some numbers around anecdotes that. But we’ll have to wait for the federal government to re-open for before we have any hard numbers.

At the same time, we’ve heard from some of you that lead times at US mills, especially those that have gained Canadian business, have stretched into late December. In other words, those producers might not have spot material available until 2026.

Lead times and negotiations

SMU will next update lead times on Thursday. And I’m eager to see whether there will be an overall trend of sharply lead times extending, or whether year-end lead times might be limited to a few producers.

We’ll also update mill negotiation rates on Thursday. I’ll be looking closely at that data as well. Because if prices are going to increase in a big way, you’d expect to see fewer mills willing to negotiate lower prices.

When we published negotiation rates earlier this month, steel buyers overwhelmingly told us that most mills were still willing to drop prices to bring in orders. To be fair, it’s not unheard of to see a result like that. Sometimes mills do a final round of discounting in hopes of bringing in big tons and stretching out lead times before announcing a price hike.

There is also a wrinkle that’s specific to this market, and it has to do with mill list prices.

Mill list prices and their pitfalls

Come to think of it, we hadn’t seen a major price hike by a US mill since June 16, according to our price announcement calendar. That was nearly four and a half months ago, when Cleveland-Cliffs tried to raise sheet prices by $40/st to $950/st. That, too, came in the wake of Section 232 tariffs doubling to 50%.

If Cliffs were to announce a $50/st price hike and an updated target price, it would in theory be at $1,000/st. I’d be shocked if that happened. I’d be less surprised if Cliffs stopped publishing specific base prices.

Because that method, while it may have noble origins in trying to increase transparency, has some pitfalls. I’m assuming the temptation, if you’re a producer, is to keep prices unchanged when the market is falling.

Nucor, in contrast, never went as high as Cliffs. They went to $900/st, up $10/st, on the same day in June that Cliffs went to $950. But we’ve since seen the Charlotte, N.C.-based steelmaker hold its list price at $875/st for the last two months – even when the market was falling. And then company increased its list by $10/st this week.

So, what does negotiable mean? Does it mean that mills are discounting below their list prices, which might have been inflated? Or does it mean that they’re negotiating below spot prices published by the likes of SMU, our parent company, CRU, and others?

That’s another question I hope to get some clarity on soon.

Market narratives diverge

Meanwhile, market narratives are more divergent than usual. Kristen DiLandro captured the bearish sentiment among some steel buyers in a sheet market report on Monday.

At the same time, some of you are telling me that prices are about to shoot higher because those same buyers are about to realize that they can no longer get HR on a 3-4 week lead time, that demand is not as bad as they thought, and that they might get sticker shock when they go back to the market to restock.

So, do we see prices continue upward as buyers try to get ahead of the next anticipated hike? That’s possible. Or do we see a brief jog higher, as we did in mid-June, and then prices resume their flat/downward trend on so-so demand?

The jury is still out. I’m eager to see the market’s verdict.

In the meantime, thanks to all of you from all of us at SMU for your continued business. We really do appreciate it.