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US market wary of second sheet price hike - 3 April 2012

Market chatter Monday centered on a $20/short ton price hike being attempted by ArcelorMittal USA, taking its ex-works hotrolled coil list price to $720/s.t.

However, a number of sources said they've yet to see much traction from the previous round of hikes announced by a handful of mills last month and questioned whether this latest one would stick.

An ArcelorMittal spokeswoman wouldn't confirm the increase, but sources said the mill had informed customers it was raising sheet prices by $20. Several top-tier mills announced price increases in March seeking to take HRC above $700/s.t, but they've fallen mostly flat on short lead times and buyer reluctance.

"I think that as of now, the mills' increases have failed to create the orders that they hoped," a southern distributor said. "They should have waited for it to happen naturally."

Platts SBB's ex-works midwestern US mill assessment remains at $680-690/s.t, as one southern broker said "no one has followed (ArcelorMittal) and no one is paying $700."

A stockist source said he believes ArcelorMittal's move "will be welcomed by the rest of the domestics."

"I know every mill is offering $35 (cwt), but from what I am hearing, they are willing to talk with a firm order," he said. "At this moment, I would not feel very good about booking at $35, but I am not sure how much of a better deal is out there."

Bank of America/Merrill Lynch analyst Timna Tanners said in a note yesterday ArcelorMittal made its announcement to customers late last week, "even as we heard the last price move did not stick.

"Lead times as low as two weeks continued to make price hikes challenging, in our view," Tanners said.

Market chatter Monday centered on a $20/short ton price hike being attempted by ArcelorMittal USA, taking its ex-works hotrolled coil list price to $720/s.t.

However, a number of sources said they've yet to see much traction from the previous round of hikes announced by a handful of mills last month and questioned whether this latest one would stick.

An ArcelorMittal spokeswoman wouldn't confirm the increase, but sources said the mill had informed customers it was raising sheet prices by $20. Several top-tier mills announced price increases in March seeking to take HRC above $700/s.t, but they've fallen mostly flat on short lead times and buyer reluctance.

"I think that as of now, the mills' increases have failed to create the orders that they hoped," a southern distributor said. "They should have waited for it to happen naturally."

Platts SBB's ex-works midwestern US mill assessment remains at $680-690/s.t, as one southern broker said "no one has followed (ArcelorMittal) and no one is paying $700."

A stockist source said he believes ArcelorMittal's move "will be welcomed by the rest of the domestics."

"I know every mill is offering $35 (cwt), but from what I am hearing, they are willing to talk with a firm order," he said. "At this moment, I would not feel very good about booking at $35, but I am not sure how much of a better deal is out there."

Bank of America/Merrill Lynch analyst Timna Tanners said in a note yesterday ArcelorMittal made its announcement to customers late last week, "even as we heard the last price move did not stick.

"Lead times as low as two weeks continued to make price hikes challenging, in our view," Tanners said.

 

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