Steel Buyers Weigh In on Flat Rolled Price Increase

We are in an interesting time for the steel industry. The pandemic is just one factor behind the stress in the market. The price increase announcements by the integrated steel mills, U.S. Steel, AK Steel and ArcelorMittal, have created another issue for steel buyers.

An executive with U.S. Steel saw the slides associated with yesterday’s SMU Community Chat webinar where we indicated early comments from market participants had the increase pegged as DOA (dead on arrival). The USS exec told me this morning: “Look forward to reading your edits of the DOA comment and instead citing that the increase is alive and well in upcoming newsletters. Increase has taken hold…already transactions at up money taking place. You yourself can look at the inventory numbers and see that there has been a large drop at service centers, and you know what is going on at the end-user segments in autos and appliance, and a few other ones. Yellow goods are beginning to pick up, and construction remains extremely busy; you have no idea how many people are looking for additional tons. SDI said the same thing on their call. There are buyers out there who recognize that prices need to go up and will go up from here; not sure your sample size was large enough to say DOA is a consensus, so disappointing to read.”