International Steel Market Daily: The Two Major Steel Companies in The United States Have Strongly Raised Prices

Near the end of last week, the two major steel companies, Nucor Steel and U.S. Steel, raised their spot hot coil quotations by US$50/short ton.

It is understood that the steel inventory level of large-scale processing centers in the United States is relatively low recently, so steel mills have a strong willingness to raise prices. However, from the actual situation, the procurement pace of downstream steel consuming enterprises has not accelerated, and most processing centers are not in a hurry to replenish their warehouses, and the spot price of hot coil is still stable at around US$1,000/ton.

In terms of downstream demand, the US auto market continues to pick up. According to the auto sales data released by the relevant departments of the United States, in May, auto sales in the United States increased by 22.8% year-on-year, 12.5 percentage points faster than the previous month, and the sales volume reached 1.4072 million vehicles. However, the overall level of the U.S. manufacturing industry is far behind the performance of the auto industry. The final value of the U.S. Markit manufacturing PMI in May was 48.4, falling into the shrinking range for seven consecutive months. At the same time, today's high inflation situation will continue to suppress internal demand, and the risk of the banking crisis impacting the credit market is still relatively high, and the pressure on the manufacturing industry will not be relieved in the short term.

In terms of price, the current price of hot coils in the United States has dropped by about 20% compared with the same period last year. Although local automobile consumption has supported steel demand to a certain extent, overall, the orders received by American steel mills are not as good as last year's level, so steel prices are still more likely to fall.