The steelmaker is increasing all
carbon hot-rolled, cold-rolled and coated prices by a minimum of $50 per short
ton ($2.50 per hundredweight), it announced on Tuesday, December 13.
“Cliffs’ minimum base price for hot-rolled steel is now $750 per
net ton,” it specified. “This additional price increase is in response to
market feedback following the company’s November price increase, as well as
improving dynamics in the raw materials and distribution markets.”
Rising scrap prices — which went up in December for the first
time since April and may increase further in January — may support this new
steel increase announcement, but not necessarily in full, according to market
participants.
“I don’t think it will fully stick,” a distributor source said.
An increase of $30 per gross ton ($33.60 per short ton) — the amount prime
scrap prices increased in December — could be absorbed by the market, rather
than the full $50 per short ton that Cleveland-Cliffs announced, he added.
Fastmarkets’ steel scrap No1 busheling, index, delivered Midwest
mill was calculated at $389.61 per gross ton on Monday, December 12,
up by 8.31% from $359.72 per gross ton in November.
The November price increase mentioned in today’s Cleveland-Cliffs announcement
raised the same group of flat steel prices by a minimum of $60 per short ton on
November 28, just two weeks and a day before this latest announcement.
That increase was followed by other major steel producers, and
while it did not necessarily jolt the sluggish market back into action, sources
have said that the mills are standing by the higher prices whether
buyers are biting on these higher-priced offers or not.
Recent market chatter suggested that a mid-month hot band price
increase may be coming, and that if it did, it could simply be intended to
legitimize the November 28 rise.
However, with the November 28 increase seeming to stand on its
own, that may not be the likeliest motivator, according to a consumer source.
“I do not think it was needed to enforce the first increase,”
the consumer source said. “I think that they are moving lead times into
February and did not want to open up without another increase.”
“Scrap going up again in January will most likely lead
mini-mills to the same conclusion, [and I’m not] seeing imports as a disruptor
at this number,” he added.
While the December 13 announcement specified a minimum increase
of $50 per ton, the $750 per ton base price mentioned for hot-rolled coil is
$65 per ton higher than recent market prices.
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was
calculated at $34.25 per cwt ($685 per ton) on Monday December 12, up by 0.74%
from $34.00 per cwt on December 9 and by 0.29% from $34.15 per cwt one week
earlier.
Before November’s price hike,
Cleveland-Cliffs most recently raised the same group of prices by $75 per ton
on August 24, which did not appear to set a new price floor and put an end to
months-long slides at the time.