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December 3, 2013
Supply & Demand in Sync – Contract Negotiations Push Prices
Written by John Packard
Over the past few months we have seen constraints in the supply of flat rolled steel as one of the main drivers behind the higher price trend. Supply disruptions continued at a number of mills due to maintenance at Severstal, ArcelorMittal, USS and others as well as the restart associated with USS Lake Erie Works. Added to the fray is the hot strip mill expansion project at Nucor Berkeley in South Carolina.
Two mills announced official price increases at the beginning of the month. AK Steel was first out on November 7th with specific base price targets – essentially coming to a $30 per ton increase above the last announcement. The next day Severstal countered with a $20 per ton increase. The base price targets on benchmark hot rolled coil was $700-$710 per ton ($35.00/cwt-$35.50/cwt). The announcements were not followed by all of the other mills but did help keep momentum on the mills side as prices did move higher during the month of November but not to the levels of the announced increases.
