Prices for steel sheet products in the United States rose during the week ended Thursday July 25 after mills kicked off their third $40-per-ton ($2-per-hundredweight) price increase in a month on Monday July 22.
Fastmarkets' weekly assessment for steel cold-rolled coil, fob mill US, was at $36.50 per cwt ($730 per ton) on July 25, up by $1 from one week earlier.
Fastmarkets assessed the steel hot-dipped galvanized (base) steel coil, fob mill, price at $37 per cwt ($740 per ton) and the all-in price for steel HDG coil with a G90 coating at $41.75 per cwt ($835 per ton) on July 25 - both up by $1 week on week.
The third price increase caught most market participants off guard as it seemed to arrive too soon after the first two rounds of $2-per-cwt price increases were announced in late June and early July.
"The market isn't strong enough to handle $120 [per] ton in a month, and lead times have not changed at all, meaning that capacity hasn't changed," a Midwest distributor said. "I don't think the increase makes sense, and there is really no good reason for it," he added.
Still, mill sources noted that extended lead times have put steel buyers in more of a mood to buy flat-rolled products.
Some mill offers for CRC and coated steel were heard in the range of $39-40 per cwt, although no actual transactions were concluded at those price levels.
Market participants acknowledged that part of the full $6-per-cwt price increase has been realized in the spot market since late June, with some consumers forced to buy amid low inventories and an absence of imports.
"So we've essentially made the mill order books look a lot better than they should, which is going to last for a little bit," a steel buyer said.
Industry participants reckoned that the recent mill hikes will likely support prices for sheet products in the US over the next couple of months.
With Section 232 tariffs on US steel imports in place, the US sheet market can seem isolated, which gives domestic mills an edge in terms of pricing.
"As long as they continue in the right market direction. and continue to keep imports out of the country - with iron ore prices where they're at and production cuts in Europe, scrap pricing at the bottom now - moving up sustainability for the next couple of months seems like a no-brainer," the steel buyer said.
The steep decline in steel prices this year - especially compared with 2018 - led ArcelorMittal to announce one wave of production cuts at its European operations in early May, followed by another announcement late in the month.
US domestic prime and obsolete ferrous scrap prices declined by around $90 per gross ton between March and June of this year. Fastmarkets' steel scrap No1 busheling, index, delivered Midwest mill, fell by 24.3% during this period, settling at $281.73 per gross ton in June compared with $372.32 per ton in March.
source: fastmarkets MB |
