AK Steel plans to raise its carbon flat-rolled spot prices, the US second producer to officially announce such a move, it said late Wednesday. Sources on Thursday indicated other producers were also raising new quotes internally.
The new minimum base prices for AK Steel were set at $420/st for hot-rolled coil, $540/st for cold-rolled coil and $550/st for hot-dipped galvanized sheet, the company said. The prices were effective immediately for new orders.
The AK Steel increase followed an NLMK announcement that it would be raising its flat-rolled prices by $40/st, but no minimum base prices were indicated.
Despite only two producers officially announcing increases, individual buy-side sources had received higher quotes from other producers.
"I must say, $420/st seems ridiculous ... we recently had all we wanted and needed at $350/st," a Midwest service center source said about overall HRC pricing. "I do think the mills can collect a little more right now, but no way $420 in my mind."
However, AK Steel's amount of first-quarter spot availability was questioned by a second service center source. The steelmaker announced in October it would temporarily idle the blast furnace and related steelmaking operation at its Ashland, Kentucky, works.
With the reduction in output, the service center source said he was unsure how much spot material AK Steel would be selling in Q1.
The service center source said he had received indications Wednesday from other producers that any outstanding spot orders that had not already been accepted would be replaced. A mini-mill had quoted him $400/st for HRC, while he was still waiting for a competitor to respond.
Following NLMK's announcement, the service center source said his customers were all coming off the sidelines. "These were the guys who locked in pricing in October and November [2014]" and watched pricing deteriorate throughout Q1, he said. The pain resulting from the start of 2015, led many wait as long as possible to commit to 2016 needs. The service center said there may still be offers out there for December availability in the $360-$370/st range, but by next week pricing would be higher across the board.
A mill source said they were "pausing" on activity until next week, but had sold some value-added HRC at $390/st delivered into the upper Midwest.
Platts maintained its daily HRC and CRC assessments at $360-$370/st and $490-$500/st, respectively. Both prices are normalized to a Midwest (Indiana) ex-works basis.
