US sheet prices appear to be crystallizing around the new hot-rolled minimum base price of $930/short ton, but at least some market sources fear a correction may be looming, Kallanish reports.
"Many people, including myself, are perplexed over the small spread between hot-rolled coil and cold-rolled coil, but definitely hot-rolled coil prices have firmed up," says a source at one top-tier mill. "$920 hot-rolled is easy to conclude today, and $930/st for small orders, and $940/st a possibility. It looks like July scrap prices are going to be strong, so look for mills to push asking prices slightly higher than their last ones."
One buy-side source maintains hot-rolled can still be bought in his region for $900-920/st, but a second says all available mills appear to be tightening the reins.
"They should be consolidating as the Canada imports get sorted out," he says. "And we should be close to the end of that happening. Pricing on new import orders, and orders more recently placed, are weighing on mills' tandem bookings - hence the reduced hot-rolled to cold-rolled spread. If demand isn't supportive, overall prices could come under pressure as early as September."
That September correction concern is also sprouting up on the West Coast, according to a third buyer.
"From what I am reading and hearing, the numbers are strong. What I am feeling is contrary," he says. "Granted, we are in a holiday week, but I've seen some slow down in these past two weeks. I really think people are concerned about a price correction in September."
Kallanish moved hot-rolled Monday to $920-940/st and left cold-rolled at $1,000-1,030/st. All prices are ex-works, domestic mill.