In the U.S., spot pricing for cold-rolled sheet in coils has been reported as high as $740/ton from some mills for July order books, up from around $700 in June and $665 in May. "Further upside in August and September appears more likely than the reverse at this point," says analyst Mark Parr at KeyBanc Capital Markets in Cleveland. Nucor is proposing a $760 price for August, but market sources say the price may only be a gauge since the Charlotte-based steelmaker has limited spot tons available for August due to strong contract business.

Still, "most mills are having an easier than usual time filling up third quarter production capacity," Parr writes, "because of exceptional booking strength from construction, energy and industrial markets which are offsetting some incremental weakness from Detroit's third-quarter production."

Actually, when cold-rolled sheet was selling at $650/ton in April, the domestic steel mills wanted $710 for May. However, buyers balked at "too high, too soon"—even though availability has been slightly tighter. Note: Delivery leadtimes have stretched out to an average 5.7 weeks for the first six months of the year, compared with 5.4 weeks in 2005.

So, while 53% of the cold-rolled sheet buyers surveyed in June do expect to see higher prices in the next three-month period, neither they nor the analysts have a clear focus on actual transaction levels ahead. Import offerings were $720-$750 for August deliveries, and so were some mill expectations. But, the mills are not in sync; announced price proposals ranged from $680-$740/ton for June delivery—which several service center executives said was too high.

Why is the price outlook so confused? Imports and warehoused stock actually were stronger than expected earlier in the year; January-March imports of 10 million tons were 36% higher than the fourth quarter of last year's 7.4 million tons. Atop that, inventories of flat-rolled steel products increased to 2.8 months of shipments in April from 2.3 months in March. Still, plant accidents (Mittal Steel), corporate reorganization (Stelco), and labor strife (AK Steel) have exacerbated supply constraints, tightened spot shipments and created some higher flat-rolled spot prices.

J.P. Morgan's Harrowell says, "a common theme appears to be raw material push, with stronger scrap prices pushing up billet prices, and zinc price rises pushing up galvanized coil prices. But the message appears to be that the industry has pricing power, and is able to push higher costs on to its customers." "In some cases, steel companies are including raw material rise and fall surcharges into the steel pricing formula."

From a global perspective, "the reality for the metals markets is that demand remains strong, supply is not growing (and) spare capacity is virtually nonexistent," suggests Bart Melek, senior economist at BMO Nesbitt Burns in Toronto. "So, any disruption to supply due to geopolitical events or hurricanes has the potential to send prices moving higher in the near-term."

Interestingly, cold-rolled sheet price increases in Asian, European and North American markets are being pulled along by the recent inflation in hot-rolled sheet—and not because of any specific cold-rolled market circumstances. CRU analysts write from London that "sheet producers in North America and Europe have already announced price rises for deliveries in the third quarter and it appears likely, with supply still tight, that these will be enforced successfully in the market."

That's not a universal view: "Recent economic data supports the view that the fundamental backdrop for such commodities as steel will deteriorate in coming quarters," says Craig Alexander, deputy chief economist at TD Bank Financial Group in Toronto.