Pittsburgh — Sheet steel market buyers on Tuesday appeared to be getting used to hot-rolled coil prices around $640/st, especially since mill scrap buying prices are expected to jump at least $30 in March.
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"I'm costing all of our inventory closer to that $32/cwt [$640/st for hot-rolled coil] replacement cost because it's going to stick," a service center source said of the $30 price increases. With the price hikes, mills have been targeting $640/st for HRC and $840-$850/st for cold-rolled coil, according to multiple sources this week and last.
Based on market feedback, S&P Global Platts raised its daily HRC price assessment to $620-$640/st on Tuesday, from $620-$630/st on Monday. The CRC assessment was unchanged at $820-$840/st. Both assessments are normalized to an ex-works Midwest (Indiana) basis.
The service center source was confident his next buy will be in the $620-$640/st range, even though he recently placed two large orders at $600/st. Two weeks ago, two mills approached the service center "begging" for orders, he said.
"All of a sudden people talking about $50/lt scrap price increase, they're nowhere to be found," he said.
Scrap, limited imports and balanced service center inventories have made for a positive pricing environment for the mills. The only issue the service center saw was that business with his customers has slowed.
Another service center source said last week a mill offered $605/st looking to close March orders, but he expected pricing would be higher for April. On the back of upward pricing sentiment for scrap, all the other mills were looking to sell around $640/st, he said.
A mill said his HRC pricing has not changed from $640-$650/st, and galvanized sheet substrate prices are closer to $850/st than $840/st. The price hikes announced early last week pushed customers who were holding off on buying to place orders last week.
"People are convinced that pricing is reasonable given the lead times," he said, adding that HRC lead times have pushed well into April.
--Estelle Tran, firstname.lastname@example.org
--Edited by Jason Lindquist, email@example.com