US sheet steel mills are trying to leverage their recent base price hikes to change market momentum, but service center executives said Wednesday their success will largely depend on how patient buyers remain.
One Midwest service center executive said he was able to get a mill that recently announced an increase to give him an order of about 300 st of hot-rolled at its pre-increase level of $640/st, or $32/cwt, on Tuesday.
"I think if we had to come back next week with something, they'd stick to $33/cwt," he said.
A second mill that the executive regularly deals with refused a hot-rolled order at $650/st, but the executive was able to get some freight relief on a concurrent cold-rolled order.
Those mills, however, are the exception rather than the rule, he said. If he decided to shop around and not use his preferred suppliers, he said, he could likely continue to get deals around $640/st.
"There's too many people struggling to keep their lines going," he said. "I don't think there's that much activity."
A second Midwest service center executive said the mill hikes have pushed him to look for cheaper offshore material. His selling prices have remained relatively static, and about 50% of his end-user clients have accepted the relatively minor increases he's tried to push through, but margins remain tight.
"I think with the consolidation mills can do that [raise prices] in a vacuum, but import is always going to be looming," he said. "We're importing more than we ever have -- which is not a 'lot lot,' in regards to the big guys, but I can only imagine what they're doing. I'm not going to go down with my business just to have loyalty to the domestic mills."
Platts held its hot-rolled assessment firm Wednesday at $635-645/st and its cold-rolled assessment firm at $760-770/st. All prices are normalized to a Midwest (Indiana) ex-works basis.
Source: Platts
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