-We’ve heard that the forecast for the first two quarters of 2012 “should look a lot like the first half of 2011.”  Notably, these bullish prognostications have come from the supply community.  Steelmaking raw materials were spiking last year – not the case this year.  RG steel is back on.  Mittal is going to light up the West Side of Cleveland.  Much import has been contracted for.  The price of steel in the USA is much higher than elsewhere in the world.  The dollar strengthened again against the Euro last week.  Natural gas is under price pressure.  And, the price of steel in the USA is still supposed to go up? Why? Because the car forecast is for 13.8 million vehicles this year?

-The paper market seems to be portending a different near and mid term scenario.  The futures curve has been falling steadily.  February trades have been particularly bearish.  The yawning delta between North American HRC prices and those in Europe and Russia continues.  The jury is still out on February’s scrap pricing.  Although up sharply last week, many believe the price levels could be down next month.

-Yet some mills are encouraged enough by current market conditions to 1) raise prices and 2) increase production.

-Severstal announced a $ 30/ ton price hike bringing their HRC price to $ 38.50.  This ought to do it – buyers will likely sit on the sidelines and watch from here.