Steel Buyers React to Nucor Price Announcement

Yesterday, Nucor announced a $40 per ton ($2.00/cwt) price increase on all flat rolled products they produce. The increase was to take effect immediately on all “spot” orders. On paper, the increase announcement does not impact contract pricing.

However, steel buyers are advising Steel Market Update that the reason behind the Nucor announcement was two-fold: first, to stop the slide in spot pricing, which has taken hot rolled from approximately $900 per ton ($45.00/cwt) down to $835 per ton ($41.75/cwt). Second, contract negotiations are ongoing and there has been some resistance to the numbers being proposed by the domestic steel mills. Many contracts are tied to the CRU index and the possibility of prices moving higher will motivate buyers to lock in now.