Steel Prices: Nowhere to Go But Up?

Steel prices are trying to rise following the $40 per ton increase announced by the mills last month, but how fast, how far and for how long remains the subject of much speculation. Comments from SMU’s market canvas this week show buyers with two basic views: Either, “Mills are very firm on pricing. We’ve got nowhere to go but up.” Or, “I expect prices to be stable for a few weeks and then continue to drop.”

Steel Market Update has had our Price Momentum Indicator at Neutral since Nucor announced the $40 per ton flat rolled increase. As we speak with steel buyers we are hearing that the low-end offers are drying up. In other words, the sub-$660 hot rolled, and sub-$39.00/cwt base cold rolled and coated base price offers are no longer easily available. One hot rolled buyer told us yesterday that the mills are asking for a “firm” $700 per ton. However, when actual orders are being discussed, the numbers can go to $680 for relatively modest tons. We are being told to expect another price increase in the $20 to $40 per ton range as a way for the mills to cement in the full $40 recently announced and bring that bottom line number up to $700-$720 per ton on HRC.