US sheet buyers are optimistic about Nucor’s recent $40/short ton base price hike, despite the foundering of a similar hike prior to the 4 July holiday, Kallanish hears.
Nucor’s hike was immediately supported by ArcelorMittal USA. Though momentum remains flat-to-negative, at least some mills appear to be holding the line at $540/st and even advancing to $560-600/st, in some markets.
“From what I am seeing the second increase is propping up the first increase,” says one West Coast source. “Everyone is at $600/st from what I see today.”
A Midwest source says mills are “...trying hard for $540-560/st,” in all markets.
“The market’s definitely up,” he says. “Lead times have extended a bit and scrap has bottomed out.”
Scepticism remains in some quarters, however.
“[... The increase] has very little chance of sticking because of general overcapacity and slow business conditions,” says a second Midwest buyer. “They are being proactive, I believe, to try and settle the market. I believe they are doing the right thing because no one is making money at these price levels.”
Kallanish currently puts hot-rolled at $540-580/st with cold-rolled at $720-750/st. All prices are ex-works, domestic mill.