ArcelorMittal announced a new minimum price level of $500/nt on hot rolled coil (HRC) on Friday, a $40/nt increase compared to average spot price levels of around $460-470/nt.
The steelmaker also raised prices for tandem, cold mill products to a base of $700/nt, a $60/nt increase from spot prices of around $640/nt.
Steel industry consumers may feel the timing is early for impending spot sheet price increases, due to low revenue, little demand and tight supply. However, demand has likely reached a bottom and will pick up as we enter May, and the US begins reopening states which will allow industry business to resume.
Other steelmakers including Nucor and US steel have also announced similar sheet price increases, according to market participants.
Expected ferrous scrap price increases during next week’s domestic trade—due to lack of material, along with low order books and steel production cuts—are likely factors contributing to the steelmakers’ decisions to elevate prices.
May prices are expected to rise the most for primes, the grade that is most in demand and has the least supply, which will tighten the already narrow spread between busheling and HRC prices. Busheling could likely surpass $300/gt ($270/nt) during May settlements leaving little room for steelmakers to profit without higher returns on steel prices.