AK Steel is raising its base and spot market offer prices for flat-rolled steel by at least $40/nt, the company’s owner Cleveland-Cliffs announced Thursday.
Several US steel producers also announced higher sheet offer prices, including ArcelorMittal and US Steel, for the second time this month. Other mills are expected to follow suit.
Demand is gradually returning as steel buyers resume operations, and prices have begun rising. Mills have restarted production and ferrous scrap prices are projected to increase amid tighter supply, which supports sheet price increases. However, uncertainty is looming because customer orders are limited, despite having increased by10-15pc from last month, following several cancellations that extend through 2020.
The automotive industry resumed limited production this week, although its impact on prime scrap supply and steel demand has been minimal because of erratic restarts. Ford Motors, for example, temporarily closed two main plants on three occasions in Chicago and Detroit soon after reopening Monday because some employees tested positive for COVID-19, which also led to a parts shortage.
New price offers point to $540/nt for hot-rolled coil (HRC), about $90-100/nt above April’s HRC pricing of $440-450/nt. Although the bottom level of pricing was projected in May, scrap price increases may be able to pull steel prices up sooner. Current spot prices are around $485-495/nt, however, they are down by about $90/nt from a high in March. HRC lead times for integrated steel mills have extended into July, but some lower cost, EAF mini mills have lead times of about three weeks.