-A second round of price increases by Arcelor Mittal, Severstal and Nucor have been met with indifference by a buying community that is reluctant to bite on news. The increases appear to be a continued effort to bolster a price floor.  Bids remain in the $680-$700 range and some, but not a lot of tons are being booked. 

-Demand remains fairly strong and the books at the mills vary according to market segments serviced by each mill.  This second round of hikes has, however, impacted the forward curve by about $15/ton and will undoubtedly influence this week’s CRU numbers. 

-Profitability will improve over the coming months for USA mills as the costs to make steel in the USA are clearly going down.  With prime grades of scrap down as much as $ 20/ l.t. in the Midwest, we estimate that costs will be $591 per ton for USA mini mill conversion.  Mini mill margins will approach or exceed $100/ton.  

-Pricing around the world remains fairly stable to positively biased.   We see the fair value for hot roll in the USA between $640 and $660 – which would put it more in line with pricing in China and N. Europe. 

-USA is well supplied.  If lead times shorten, there will be room to give out of the currently healthy scrap / price spread.