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Tag Archives: steel mills

A Key to Steel Pricing is Scrap – and Scrap Prices are Going Higher

I have been watching scrap prices over the past few weeks since Chrysler stopped the auction process which was used to create the prime bundles market pricing.  According to Steel Business Briefing’s scrap reporter, with whom I converse on a regular basis (who is a steady reader of the Steel Market Update and calls my newsletter a “must read”); the price of prime scrap has risen by $130 per ton to $885-$900 per ton since June.

Shredded scrap has been moving higher as well and is currently being quoted at $600-$610 per ton and is believed to have room to move even higher as the month progresses due to the wide spread between prime bundles pricing and that of shredded scrap.  According to SBB’s sources the expectation is for shredded to go to $620-$640 per ton.

Scrap is used by all mills – whether fully integrated (BOF) or mini (EAF) and a number of mills are reported to be short scrap at the moment.

Higher scrap prices are going to put pressure on the domestic mills to keep prices up and perhaps be used in both contract negotiations as well as spot pricing as a reason for prices to go higher in the future.  I am not advocating higher prices just trying to keep you aware of price pressures that may come back on the steel buying consumer at some point in time.

Source: SteelMarketUpdate

Has the US Flat Rolled Steel Market Finally Hit it’s Peak?

US flat rolled mills have increased their prices every month so far this year, but now there are talks that demand may be faltering, and there is more hot rolled coil (HRC) availability.

Has the market finally reached its peak?

The flat rolled market has seen a wave of increases since the beginning of this year. Domestic mills have continually upped their prices to keep up with rising raw material costs and strong demand. But now it seems the market may be leveling off. Either that or perhaps a seasonal slowdown is occurring.

All of the major domestic mills made their July price announcements a couple of weeks ago, and to customers
surprise, the increase wasn’t as hefty as some expected. Whereas a couple months ago, increases were in the three-digits, the most recent one was modest comparatively. Two major mills even extended their July pricing through the month of August as well, suggesting that things may finally be beginning to cool off.

There have been a couple explanations for this, but most agree, as galvanized coil demand was losing its momentum, mills shifted their production to HRC, as that product was much stronger. Now, ironically, there is more tonnage available and not as strong of a demand for it. This could just be the usual summer doldrums, but it could also be the flat rolled market finally hitting the peak of its latest price rally.

The above offers are for August production and October deliveries as Chinese steel products for July production will not be available for exports, as they are to remain in the domestic market to be used in the relief efforts for the devastating May earthquake in China, according to government mandate.

Steel Mill Upcomming Steel Price Release Dates

Steel Prices – SDI (June), USS (July), Nucor (July), ArcelorMittal (July), Severstal – especially Sparrows Point (July) and the conversion mills – The Techs, Sharon Coatings, CSN and Wheeling Nisshin should all be coming out with prices either yet this week or, by early next week.

Source: www.steelmarketupdate.com