June 2009 | North American Steels
Steelmakers attempt price hike: Long Product Highlights
We do not believe May's long product price rise is the start of an upward trend.
As we stated last month, under the prevailing market conditions, the only support for price increases in the long products markets would be a cost-push increase if scrap prices rose in the second quarter. Sure enough, scrap prices did rise in May on the back of strong export demand and signaled the raw material surcharge used by most steelmakers. On all products but wire rod, the surcharge increase was partially offset by a decrease in the base price. In the rod market, producers increased prices $35-40/ton effective June 1, but spot prices did not increase in May in response to the announcements. Prices for May held steady at $560/ton, with an increase to $595/ton for June.
Some buyers are skeptical the price hikes will stick, given that the gap between domestic and import prices will...
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