[Stay on top of transportation news: Get TTNews in your inbox.]
Nucor Corp., the largest U.S. steelmaker, raised prices for a fifth time since late October, adding to signs of a rebound in the industry. ArcelorMittal, the world’s top producer of the metal, also boosted prices.
The cost for new orders of hot-rolled, cold-rolled and galvanized sheet will increase by $40 a short ton effective immediately, Nucor said in a letter to clients Jan. 8. The Charlotte, N.C.-based company didn’t respond to an email seeking comment. The metal is used in construction.
U.S. Midwest domestic hot-rolled coil steel index futures have rebounded 19% from a three-year low in November amid a strengthening U.S. housing market. Declining mortgage rates are making homes more affordable, boosting demand for steel, Commercial Metals Co. CEO Barbara Smith said Jan. 6.
The price increase is “a positive for steel sector sentiment,” Jefferies analysts said in an emailed note. “The move will be broadly supported by peers.”
“We are not surprised” to see a mill that uses ferrous scrap to make products lead the charge, said Cowen & Co. analyst Tyler Kenyon. Prices of ferrous scrap are expected to settle higher this month from December, while “positive supply-side sentiment” from U.S. Steel Corp.’s idling of its Great Lakes facility and an unplanned outage at ArcelorMittal’s Indiana Harbor East complex may also help, according to Kenyon.
A phase-one trade deal between the U.S. and China in December also makes long-term prospects for the steel industry “brighter,” said David Owen, economist at IHS Markit.
Luxembourg-based Arcelor told clients Jan. 8 that prices of all new orders of flat-steel products will increase by at least $40 a ton, effective immediately.
The last time prices of the metal have risen this fast was after steel tariffs were imposed by President Donald Trump in March 2018, with no formal announcements made by steel mills, according to Kenyon.
Want more news? Listen to today's daily briefing: