The US flat-rolled market's lull in upward momentum and buying is likely only temporary and attributable to the upcoming Fourth of July holiday, and mills' near-term target remains $500/st hot-rolled, market sources said Wednesday.
A mill source said the latest round of increases was getting some acceptance, but it was "certainly slower to gain traction" than the first round.
A buy-side source said hot-rolled pricing is generally moving up and operating in a band between $460-$480/st.
"We're in a [transitional] period, however," he said. "July is a slow time to announce price increases as no one wants to stock up during one of the slowest shipping months of the year."
He added that $500/st hot-rolled could be attainable in the next 60 days.
"There aren't a lot of offshore options now and industry shipments are good," he said.
A service center source agreed that $500/st is the ultimate goal for mills, and they could get a boost in that direction from buyers looking to stock up ahead of ArcelorMittal and US Steel's labor negotiations later this summer.
"The mills believe there will be inventory build-up in mid-July to counter shutdowns in September," he said.
A West Coast service center source said the only real stumbling block to higher prices seems to be falling Asian numbers.
"I think there are definitely (inventory) holes out there. Someone's consuming somewhere," he said. "I know Asian prices are still falling, though, so as much as we see domestic price stability and increases looming, we need to be mindful of what the world price will be."
Platts held its hot-rolled assessment Wednesday at $460-$470/st and its cold-rolled assessment at $570-$590/st. All prices are normalized to a Midwest (Indiana) ex-works basis.
source: platts
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