AK Steel Raises Spot Prices by $40/Ton

On Friday, January 6, 2017, AK Steel became the first U.S. steel mill to increases flat rolled steel spot prices. The mill announced an increase of $40 per ton ($2.00/cwt) effective immediately on all flat rolled, which for them includes hot rolled, cold rolled and galvanized steel products.

This is now the fifth (5th) price increase announcement on flat rolled steel in the current market cycle. AK Steel announced a $30 per ton ($1.50/cwt) price increase on October 24, 2015. Since then, the mill has raised spot transaction prices on flat rolled steel on November 8th by $30 per ton, one week later (November 15th) they took spot prices up by $40 per ton, then on December 1st they raised prices by $40 per ton. Since the first increase announcement made on October 24th, AK Steel has increased steel prices by a minimum of $180 per ton ($9.00/cwt).

Our opinion (SMU) is the other steel mills will follow the AK Steel lead and announce new transaction pricing early next week (week of January 9, 2017).

AK Steel did not provide a reason as to why they are raising steel prices at this time. However, Steel Market Update market intelligence has been reporting scrap prices as rising over the past few months and early indications are ferrous scrap prices will increase in January by $30-$40 per gross ton.

Most spot steel price offers out of the domestic mills have been $600 to $620 per ton prior to the announcement by AK Steel. We believe the “target” price will be $660 per ton on hot rolled steels. On Thursday SMU learned of two mills asking for $640 per ton without a formal price increase announcement being in place.

Steel Market Update will continue to monitor the steel mills and their customers so that we can provide our clients a clear view of steel spot prices at any point in time as well as the momentum behind prices and any changes in the trends as they occur.

We thought our readers might be interested in how our service center spot pricing (what service centers are charging their end customers) graphic looks with the new AK Steel price increase on it: