-Reports heralding the floor of HRC price slide had some insight.  Two mills so far have announced price increases and more announcements should be expected.  Mills are aiming for $635-640 for HRC. 

-The window appears to be narrow for the timing of price hikes.  Supply sources have been telegraphing their intentions for some time, and wanted to make announcements ahead of an anticipated lower scrap price settlement next week.  These announcements may even have the effect of moderating the decline of scrap as dealers attempt higher settlement prices.   International cargo transaction prices have crept up as of late.  It is important to note that coated books at the mills are relatively strong vs. HRC.  

-Internationally, much pressure remains on commodities as most macro economic factors point to slowing global growth (I.e – slowing China, European debt crisis, currency pressures, etc.).

-Increased order activity over the last couple of weeks as large buyers entered the market have shored up Hot Rolled order books for most mills.  This has taken off the pressure to continue to lower prices.  The futures curve is biased to higher prices in the fourth quarter.  We believe that upside however will be limited here as prices could build maybe to $680 – at that point we would look for erosion toward the end of the year to numbers that will possibly be below those of today.  

-Inventories are relatively thin and few have been willing to commit to ever shorter lead times and lower transaction prices – that dynamic is likely to reverse for the next couple of months.  Although we are reticent to cite the past as a good predictor of the future, we have seen late summer rallies in several of the last four or five years and they tend to stick for a time.