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Nucor counters sheet hike with $30/T move
PITTSBURGH - Carbon steel sheet spot market prices have been muddled slightly by an increase announced Friday by market leader Nucor Corp., which countered an earlier $50-per-ton hike by competitors with a more moderate move.
Charlotte, N.C.-based Nucor said it was boosting carbon steel sheet prices by $30 per ton, effective immediately. The increase, supported by a $30-per-ton hike also announced by Duferco Corp., came just days after several U.S. steel producers announced their intent to increase prices by $50 per ton.
"I think it's clear that at this point Nucor thinks $30 is all the market will bear," one Midwest service center source said. "It's a little surprising to me. I figured they'd go $50, too. But maybe they see things settling down a little bit."
Nucor didn't return calls seeking comment Friday. However, the company has stated on numerous occasions that it would strive to be competitive in the market in terms of pricing and would allow market factors to determine steel prices.
But this clouds the level of spot market prices, buyer sources said, pointing to recent $50-per-ton increases by AK Steel Corp., West Chester, Ohio, and Severstal North America Inc., Dearborn, Mich., that pushed prices for hot-rolled sheet to $900 per ton ($45 per hundredweight) and cold-rolled product to about $1,000 per ton ($50 per cwt).
If Nucor's smaller increase prevails in the market, the buyer sources said, hot-rolled sheet would be priced in the neighborhood of $875 to $880 per ton ($43.75 to $44 per cwt) and cold-rolled sheet at $975 to $980 per ton ($48.75 to $49 per cwt).
Nucor said in a Feb. 18 letter to customers that the increase was being sought "due to increased order activity and continued escalation of raw material costs." The letter stressed that the increase was for a minimum of $30 per ton and Nucor reserved the right to requote offers.
Carbon steel sheet producers have increased prices seven times since mid-November, lifting spot market tags for hot-rolled sheet nearly 61 percent. Most of those increases, especially those early on in the sequence, were attributed in large part to rising costs for steelmaking inputs such as scrap, iron ore and coal. More recently, strengthening demand has been cited by steel buyers, who have seen input costs stabilize somewhat.
"I agree that $30 must be what (Nucor) thinks the market will bear," a service center source in the South said. "Scrap prices were not up in February. I guess maybe they are hoping the market will find this a little more palatable."
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