ArcelorMittal USA began advising their customers late on Tuesday (October 17, 2017) of their intention to raise flat rolled steel base prices. In an internal memo sent to the ArcelorMittal commercial team the mill advised, “All new opportunities for hot rolled, cold rolled and coated sheet products that require delivery in the 4th Quarter of 2017 should be specifically inquired for production availability before any formal or verbal acceptance of an order takes place.”
The mill then went on and advised that the following “minimum” base prices on sheet products are to be in effect “immediately”:
Prior to the ArcelorMittal USA price increase announcement, Steel Market Update analysis of steel prices found flat rolled steel prices continuing their slow slog south (prices are moving lower). The pace has not accelerated, but there are questions as to whether some of the steel mills are cutting "quiet" deals in order to fill their fourth-quarter order book without giving the steel away.
One service center put it to us this way: "If you have index contracts, those prices aren’t that attractive, so my guess is some cheaper pricing must be out there to motivate anyone wanting to buy big volume right now. My guess is in the next two weeks there will be a lot of 'quiet deals' being done on volume to get December books full. For those who have learned that they can live comfortably with 2 months of inventory, even a so-called 'deal' right now isn’t that attractive, considering we could be entering a phase of lower input cost for an extended period."
We will have to wait and see if the ArcelorMittal price increase announcement has any impact on lead times or price negotiations with steel buyers. Steel Market Update is keeping our SMU Price Momentum Indicator as pointing toward lower prices over the short term. We will adjust the indicator to neutral as soon as another steel mill follows the ArcelorMittal lead. AM USA has done something interesting with their increase as they have identified the "minimum" base prices for hot rolled ($625 per ton), cold rolled ($825 per ton) and hot-dipped galvanized ($825 per ton). You can compare those base prices against what we are publishing for flat rolled steel prices for this week.
One of the questions we get regularly is what are steel buyers and sellers of steel saying about their business (demand) and inventory levels? Over this past week, Steel Market Update spoke with quite a few companies and asked them how they were seeing business and if their company was building flat rolled or steel plate inventories. A number believe flat rolled steel prices will return to their normal seasonal swoon in early fourth quarter, only to rebound when steel mill lead times reach into the New Year.
The Nucor Sheet Mill Group, which handles flat rolled products, announced a minimum of $30 per ton ($1.50/cwt) price increase on hot rolled, cold rolled and galvanized steel products. The increases are to go in effect immediately, according to the letter emailed to the Nucor customer base this afternoon.
Nucor’s Plate Group announced a $30 price increase today due to escalating raw material and input costs. Nucor will increase transaction prices on all new orders for carbon, alloy and heat-treated plate by $30 per ton, effective immediately, the steelmaker said.
On Friday, June 16th SSAB Americas became the third U.S. plate-producing steel mill to announce a $30 per ton ($1.50/cwt) plate price increase. As with the announcements made by Nucor and ArcelorMittal earlier in the week SSAB made the increase effective immediately on transaction (spot) pricing.
On Friday, June 16, 2017 USS/POSCO Industries (UPI) located in Pittsburgh, California increased flat rolled steel prices by $50 per ton ($2.50/cwt). The steel price increases were to go into effect “immediately.”
This afternoon ArcelorMittal USA matched a previous mill plate price announcement taking plate price up by $30 per ton. In a emailed letter to their customers ArcelorMittal advised transaction pricing will be increasing by a minimum of $30 per ton. The increase applies to all non-contractual carbon, HSLA, alloy, heat-treated, and specialty plate products.
On Friday, June 2, 2017 California Steel Industries (CSI) became the first domestic steel mill to announce a $30 per ton price increase on all of their flat rolled steel products (hot rolled, hot rolled pickled & oiled, cold rolled and galvanized).
On Monday, June 5, 2017 Nucor Sheet Mill Group announced to their customers of their intention to take hot rolled, cold rolled and galvanized up by a minimum of $30 per ton effective immediately.
Steel Market Update (SMU) has been contacted by end users, distributors and steel mills regarding an article published by another trade publication on Galvalume. The article, which was published on Thursday, May 18, 2017, quoted Keith Medick, president and CEO of Union Corrugating Company, as he made the point that there is not enough light gauge Galvalume production in the United States to meet demand. Steel Market Update and industry consultant, Paul Lowrey of Steel Research Associates, will tackle that subject (Galvalume and production capabilities - and misunderstandings) in a future issue of Steel Market Update.
First, however, we have been asked by steel mills, distributors and end users to comment on a statement that was made by the author of the trade publication article regarding Galvalume and trade suits. “Galvalume... was not included in a US trade case last year targeting coated flat-rolled from China, India, Italy, South Korea and Taiwan, nor was it included in a duty-circumvention investigation targeting cold-rolled and coated Flat-rolled steel from Vietnam.”
That statement is incorrect and has created some confusion in the marketplace.