The US steel sheet market is anticipating a price increase, sources said this week, with chatter beginning on Wednesday but becoming more widespread on Friday, as talk of producers suspending outstanding offers spread.
Platts maintained its hot-rolled and cold-rolled assessments at $640-650/st and $760-770/st, respectively. All prices are normalized to a Midwest (Indiana) ex-works basis.
Buyers were waiting for an announcement late on Friday following talk that AK Steel had said outstanding offers were no longer effective at the end of the business day Thursday. A buy-side source said Nucor was doing the same on Friday.
A Midwest buyer said Thursday morning he received multiple calls from his customers looking to shore up previous offers, trying to get in front of a possible announcement of a price hike from producers.
He added that hot-rolled coil being offered at $640/st was no longer attractive. He said he was starting to buy at $630/st more frequently and even as low as $620/st. The buyer said he had recently purchased about 3,000 st from two separate Midwest mini mills for delivery in early December.
The two buys were not considered in the Platts daily HRC assessment because they exceeded the maximum volume order size specification of 500 st.
The buyer agreed that while market fundamentals do not necessarily justify a price increase from producers, he did believe the calendar is on their side.
"It could put a temporary floor," he said, noting that the market typically takes about two weeks to adjust to an announced price hike. "Even if [the price hike] falls on its face, it usually leads to static pricing, and this will take you into November. From there you have the holidays and the mills are just looking to book up December and get out of the year."
Another buyer agreed that he would not be surprised to hear price hike announcements. He noted, however, that producers may jeopardize future orders in the first quarter with a price hike because it could encourage import deals, which buyers may be on the fence about, set to arrive early next year.
