Mills Seek Third $40 Price Hike in the Past Month

Domestic steelmakers showed solidarity this week in their pursuit of higher flat rolled steel prices with most major mills announcing their third $40 increase in just the past month. U.S. Steel and USS-POSCO Industries (UPI) were the latest to notify customers of their price change on Tuesday, following on announcements Monday by Nucor and ArcelorMittal USA.

ArcelorMittal USA announced higher minimum base prices of $630 per ton for hot rolled steel and $800 per ton for cold rolled and coated products, setting a clear target for what the mills hope to collect. The $630 per ton benchmark for hot rolled is in line with the other mills’ $120 in total increases added to the market’s low of approximately $510 per ton reached last month.

Whether the market will accept that large a jump in such a short period of time, and whether there is enough real demand to sustain it, remains to be seen. Until the recent reversal, steel prices had declined by 40 percent since last July when they peaked at around $910 per ton. Most buyers have stayed on the sidelines this year, reluctant to buy steel that was likely to be cheaper in the future. With steel prices now apparently on the upswing, buyers may finally be getting back in the game to stay ahead of the next increase.

In addition, ferrous scrap prices are expected to increase anywhere from $10 to $30 per ton in August, adding support to the higher finished steel prices.