Steel mills trying various price-increase ploys
Steelmakers push flat-rolled, structural steel price increases
By Tom Stundza -- Purchasing, 6/4/2009 10:14:00 AM
Steelmakers are juggling with future prices of sheet steel in an attempt to stop the steady 10-month decline and are trying to push higher beam prices onto a reluctant marketplace.
Severstal North America is seeking to boost spot market prices on carbon flat-rolled steel products by $30/ton in July, when AK Steel is seeking a $20/ton increase. Neither company is willing to explain the base price level from which they want higher prices. Platts.com is reporting that the goal of the mills may be to get the July ex-works base prices for hot-rolled sheet in coil at $400/ton and cold-rolled coil at $480.
Some market sources say hot-rolled sheet is selling in a range around $380 this month although bookings have been reported to Purchasing.com as low as $360. Also, although some reports have cold-rolled sheet in coil selling at $450 this month, market sources have told Purchasing.com that cold-rolled sheet as low as $440.
“This (pricing) action reflects, in part, the continued high costs of raw materials in view of weak pricing in the marketplace and allows Severstal North America to recover some of its costs,” Dearborn, Mich.-based Severstal says in a statement.
Meanwhile, a $20/ton price increase on structural steel may be holding with some service center buyers but even they are debating whether end-use buyers at construction companies will accept the higher prices. So far this month, they haven’t; in fact, after the price hike was announced in May, the spot price average dropped to $687 from $763 in April because of reports of plentiful stocks across the Midwest. American Metal Market, for example, reports that heavy distributor inventories in the Texas Gulf, in particular, continue to weigh on the market.
The steel beam price increase was initiated in late May for June-July implementation by Nucor-Yamato Steel in Blytheville, Ark., despite anemic end-market consumption and was followed by such other producers as Gerdau Ameristeel in Tampa, Fla., and Steel Dynamics' structural division in Columbia City, Ind. At that time, an SDI spokesman said the company believed it had “seen the bottom" in prices but admitted “the market may bounce along for a bit more then rise when demand rises.”
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