Service Center Spot Price Index Anticipates Acceptance of Mill Increases

ArcelorMittal USA announced a $40 per ton ($2.00/cwt) price increase today, which is in line with our expectations that an increase was inevitable based on comments from service centers and manufacturing companies responding to our flat rolled steel market trends questionnaires over the past few weeks. By the end of the day, NLMK USA had joined AMUSA as they too announced a $40 per ton increase to their flat rolled steel customers.

Over the past 6-7 weeks, manufacturing companies and steel service centers have been reporting distributors lowering spot prices to their end user customers. The key being more than 75 percent of the service centers were reporting their company as lowering spot pricing, which puts our index in an area we call “capitulation.”