AK Steel upped flat rolled prices another $50 /nt on Wednesday, and market sources are suggesting that more increases are on the way from other domestic mills, namely Nucor, for July shipments.
Order books are still open for June production with prices significantly higher than prices were for May. Nucor upped its prices by $180 /nt ($9.00 cwt. or $198 /mt) for June shipments; however, when taking a realistic look at what flat rolled material is generally going for on the spot market, it seems that Nucor's prices are on the low end of the spectrum.
Nucor's base price for hot rolled coil (HRC) is $50.00 cwt. ($1,102 /mt or $1,000 /nt) and its base price for cold rolled coil (CRC) is $55.00 cwt. ($1,213 /mt or $1,100 /nt) for June production. However, not all domestic mills have material available at those numbers, unless, of course, it was already ordered last week. Current spot prices for domestic HRC run from $50.00 cwt. to $52.50 cwt. ($1,102 /mt to $1,157 /mt or $1,000 /nt to $1,050 /nt) ex-mill, while CRC ranges from $55.00 cwt. to $57.50 cwt. ($1,213 /mt to $1,268 /mt or $1,100 /nt to $1,150 /nt) ex-mill Midwest. Prices on the West Coast are approximately $3.00 cwt. higher.
US scrap dealers are anticipating a $30 to $50 /long ton scrap increase in early May, and flat rolled buyers agree that whatever amount scrap goes up, domestic mills will be pushing their prices up by a similar amount.
All of these increases are coming at a time when demand is just okay, and no improvement is on the horizon. Two end-use markets, energy and agriculture, are still said to be at an above-average level, but the construction and automotive sectors are still very slow, and consumption in general is said to be down. Despite the lackluster demand, prices keep increasing, mainly due to the higher raw material costs and to the tight supply caused by import unavailability.
On the cold rolled side, there are import offers from Chinese mills; however, import hot rolled coil offers are virtually non-existent.
Cold rolled coil offers from China have increased significantly in recent weeks, with new offerings priced approximately $7.00 cwt. ($154 /mt or $140 /nt) higher than that of two weeks ago. Chinese cold rolled offers are now ranging from $56.00 cwt. to $57.00 cwt. ($1,235 /mt to $1,257 /mt or $1,120 /nt to $1,140 /nt) FOB loaded truck, in US Gulf ports.
The above offers are for third quarter arrivals, and many US buyers are taking advantage due to the comparable domestic price. In this market, it is very uncertain where prices will be by mid-third quarter, and supplies are tight, so buyers are taking the opportunity.
The export market is said to be very strong, and the amount of tonnage shipped overseas is increasing. Latin America and Mexico are the primary recipients of US flat rolled products for now, although more exports will be making their way to Europe when vessel availability loosens up.