The US sheet steel market was abuzz because of multiple mill price increases on sheet products as well as zinc coating extras, but with the announcements so fresh, buyers on Tuesday could not be sure if the third round of price hikes would be successful.
Nucor and AK Steel increased sheet prices $40/st on Tuesday, independently following a similar increase by ArcelorMittal USA establishing minimum base pricing of $560/st on hot-rolled coil and $780/st on cold-rolled coil and hot-dip galvanized sheet substrate. USS Steel also increased its quotes, according to market sources.
A mill source said the other two price increases probably pulled forward demand.
Two service centers and an end-user agreed that they placed extra orders when they perceived the market bottomed and probably would not have to place any substantial spot orders for the rest of the year.
The mill source admitted that the price increases were supply driven and meant to recoup increased costs, but that they were not justified by bolstered demand. Even the mill source was surprised by the third round of price hikes.
"We thought maybe a third round would be after Thanksgiving. This is almost like a back-to-back announcement," he said.
In the week of November 7, mills announced $30-$40/st price increases.
The price increases are justified by higher met coal and iron ore prices, another mill source said.
"With the low level of imports expected in the near term, and low service center inventory, there isn't a lot stopping mills from continuing to increase price unless automotive slows more than expected or mills rush to bring capacity online," he said.
One service center source said he was surprised that CRC and galvanized sheet have maintained about a $200/st spread over HRC.
"You would think that gap between HR and coated would have started coming down because automotive seems to be really softening," he said.
An end-user said even though mills have been aggressive in pushing these price increases, they were still proactively calling customers, trying to get them to commit to larger volume orders.
Another service center said mini-mills have been able to be a little more choosy with their sales for December and are not competing as aggressively on price as they were before.
The mini-mills have been pretty firm about the prices last week, the source said, and the price increases Tuesday will help to cement even higher prices.
With little buy-side interest on Tuesday, S&P Global Platts maintained its daily HRC and CRC assessments at $500-$520/st and $700-$720/st, respectively.
Both assessments are normalized to an ex-works Midwest (Indiana) basis.
