Steel Products Prices North America
SMU Market Trends: Will the Mills Seek a Price Hike Soon?
Written by Tim Triplett
June 23, 2019
With steel prices at such surprisingly low levels, it’s only a matter of time before the domestic mills announce a price increase. The only point of debate is when. There’s clearly some disagreement over whether the market has found a bottom yet.
Slightly more than half of the service center and OEM executives responding to Steel Market Update’s market trends questionnaire this week believe the domestic mills could announce a price increase within the next 30 days. The other half feel prices still have further to fall before the market will support a price hike. If the mills do make an announcement soon, more than two out of three respondents to SMU’s latest poll say they will fight it.
Steel Market Update asked: Do you think domestic mills will announce a price increase within the next 30 days?
Here’s what some respondents had to say:
• “With current CRU prices below pre-tariff numbers, why wouldn’t they?”
• “Lead times need to extend a little and scrap has to stop going down for a price increase to be announced.”
• “They need to start cutting back on capacity first.”
• “Capacity shuts are imminent and this will support price increases.”
• “They will try, but demand is steady and there’s less available output. Several mills will cave and not support it even if they announce.”
• “They won’t announce unless some market fundamentals change like scrap starts to increase or inventories bottom out and lead times lengthen, etc.”
• “Probably not, but they will try to stabilize offerings in the spot market.”
Increase Likely to Get Support?
SMU also asked: If the mills announce a base price increase on the products you purchase, will you accept or fight the increase? Seventy percent of respondents said they would fight it.
Here’s some of their comments:
• “We always fight it, but the market will dictate whether or not the increase will stick. My strong gut feel is that the next increase will be successful.”
• “Everyone would welcome them. Stop the inventory devaluation and put a floor on prices.”
• “I suspect service centers and distributors are at capitulation, especially from a cash flow basis. Financial partners can be very persuasive in forcing money-making moves.”
• “It would have to be supported by something other than wishful thinking, like increased scrap costs or a demand surge.”
• “Until they can stabilize this downward trend and get scrap up, there is no justification.”
• “If it’s just to stop the bleeding, it will be hard to support. If the usage is behind it, I will support it.”
Tim Triplett
Read more from Tim TriplettLatest in Steel Products Prices North America
Nucor holds HR price steady this week
Nucor is holding its hot-rolled (HR) coil consumer spot price (CSP) flat this week.
SMU price ranges: Sheet, plate largely unchanged
Sheet prices varied this week. While hot-rolled (HR) coil pricing was largely flat, cold-rolled (CR) coil and tandem product pricing eased slightly reflecting the momentum shift seen last week for HR coil. SMU’s average HR coil price was flat from last week at $835 per short ton (st) – potentially emphasizing the tension between competing […]
Nucor posts $830/ton spot HR price for week of April 8
Nucor said its spot hot-rolled (HR) coil price this week will be $830 per short ton (st).
US HR prices rebound, no longer near parity with imports
US hot-rolled coil and offshore hot band moved further away from parity this week as stateside prices have begun to move higher in response to mill increases.
Galvanized buyers report solid demand, balanced inventories
Galvanized buyers reported solid demand and balanced inventories this week and were anticipating the sheet price increase announced by Cleveland-Cliffs on Wednesday.