US steelmakers hike prices again in face of virus concerns

NEW YORK: Two of the biggest American steelmakers are increasing prices again in a bid to capitalise on tight supplies, even as the coronavirus damps the outlook for metal demand.

Nucor Corp and US Steel Corp notified clients that they are raising steel sheet prices by at least US$40 per short ton, according to notices obtained by Bloomberg.

The hike marks at least the second this year for Nucor, and is the latest in a series of increases across the industry going back to October.

In the current hike, mills are betting that shipping snags stemming from concerns over the coronavirus will limit inventory restocking, according to Tyler Kenyon, an analyst at Cowen.

The increase also comes after tentative signs that the global manufacturing slump may have started to ease at the beginning of the year.

“Recent surveys of steel distributors and downstream manufacturers suggest inventories of sheet have come into better balance the last two weeks, so supply and demand feels a bit more balanced than it has for most of this year,” Kenyon said by phone.

“And to a lesser extent, we’ve been hearing some speculation that mill outages in April may benefit prices going forward.”

There are signs that the producers have had limited success so far in raising prices.

Hot-rolled coil prices, the benchmark for domestic steel, are down 1.4% in 2020 after declining 18% last year. An index of steel-related US companies has tumbled 22% this year, with more than 11% of that drop coming so far this week.