Steel Dynamics, Inc. has announced a $30 per ton price increase for its flat-roll sheet products, following Nucor's lead, effective with shipments in the second quarter of 2003. The company only recently opened its order book for second quarter shipments.
"We wanted to share our perspective regarding recent conflicting reports on pricing and cost trends in the U.S. steel market," said Keith Busse, president and CEO of Steel Dynamics. "With an improving outlook for demand, we believe a $30 per ton increase from first-quarter pricing levels is appropriate when considering both market and cost factors. As we have previously noted, domestic selling prices during the first quarter of 2003 for sheet steels have weakened to well below last year's highest levels, particularly for hot-rolled bands. On a positive note, global market demand for steel is increasing and is now impacting the U.S. steel market.
“During the quarter, Steel Dynamics will ship about 70,000 tons of light-gauge, hot-rolled steel for export to China with additional export sales expected in the second quarter. With an improving economy, we expect domestic steel demand to increase in the coming months.
"The recent increases in the cost of steel scrap are a factor in announcing the second quarter price increase," Busse said. "We have not seen the marked increases in scrap prices that are being reported in the press by others. Our first quarter increase in scrap cost will be approximately $2 to $3 per ton compared to the fourth quarter's average cost, but we do anticipate an increase of up to $15 per ton in the second quarter as compared to the first quarter's average cost. Our lower scrap costs are attributable to buying in more favorable Midwest scrap markets, our buying practices, mix requirements, and other factors. Our price increase seeks to recover the increased costs we foresee in the second quarter and restore pricing of our flat-roll steels to more normalized values."