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PrintForeign mills and traders are following U.S. steelmakers’ lead and ratcheting up steel tags in a sales environment where steady price erosion had virtually priced importers out of the U.S. market.
Importers have raised prices in the wake of hikes of $60 per ton ($3 per hundredweight) by major U.S. flat-rolled mills earlier this month, with some hot-rolled coil import transactions reported at $675 to $700 per ton.
China’s Baosteel Group Corp. last week raised cold-rolled coil prices by at least $50 per tonne ($45 per short ton), boosting pressure in the market, some traders said.
"At this rate, no one is making any money unless you sell (cold-rolled coil) at $820 per ton," one trader said. "All the mills are going nuts, and people are overreacting."
Traders question if the latest flat-rolled price increase will gain traction, given the softness of the U.S. economy and downbeat economic indicators .
"There are such wild fluctuations all over the place," a second trader said. "What are the chances the domestic mill price hikes will stick?"
Market participants reported that Mexican mills have selectively raised rebar prices, citing a $10-per-ton increase for material going into Texas. Limited inventory in that region and rising raw material costs reportedly convinced the mills they could get a higher price.
"The Mexican mills are raising prices because there are no vessels (carrying rebar) coming into Houston," one distributor source said. "They’ve (Houston) got dust. And the Mexican mills are being smart about it."
As a result, traders are reporting transaction prices between $700 and $715 per ton.
Considering the state of the economy, it didn’t make sense that rebar prices would go up, one service center said. "Imported rebar is already pretty expensive. And domestic prices have not reached the bottom yet."
A distributor source said his main concern was that domestic mills would announce another price hike—and soon. "The Mexicans just increased their prices. But I’m more concerned about the (rumored) price hike on Oct. 1, so I’m going to load up on product (rebar) next week to be safe," he said.
While steel consumers question the ability of their mill suppliers to pass through the latest hikes, rumors of upcoming U.S. increases seem to bode well for importers.
"The markets are swinging; there are more movements than you can shake a stick at," the third trader said. "The markets are still inverted, as domestic is cheaper than foreign, but we’re selling at higher prices and our volumes haven’t changed. We’re still making the same sales because of the market."
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