New York (Platts)--25Nov2010/842 am EST/1342 GMT

Most flat-rolling steel mill lead times in the US market are extended into January and mills are "reportedly planning a second price hike to $580-$610/st" ex-works for carbon hot-rolled coil, according to Timna Tanners, New York-based UBS analyst, in a late-Wednesday note.

Fresh back from a tour of Cleveland and Pittsburgh in the US, Tanners told clients: "A scrap dealer told us he sold shredded scrap up $40/t for December, above the up $20-$30/t quotes we had heard last week." She explained that the improved scrap demand is driven by both domestic and overseas demand, particularly exports to South Korea and Turkey.

"A weaker dollar and container availability have encouraged [scrap] exports," Tanners said. "We think potential greater Chinese demand can also fuel higher prices, but have not heard any increase yet in demand," she added.

The UBS analyst acknowledged that "mill discounts appear to have dried up, and the higher scrap and met coal costs are reinforcing steel mill will to raise [finished product] prices. We think seasonal demand into Q1, shrinking imports, and some restocking will further solidify price hikes."

In fact, the Platts midpoint assessment for domestic-made hot-rolled coil increased Wednesday to $555/st ex-works Indiana, with pricing power apparently swinging back to US producers.

Tanners said she is now forecasting HRC "at $650 for 2011, up from recent spot at $550-$560."

Meanwhile, she added that during her Pittsburgh-Cleveland visits, she determined that "titanium scrap prices were seen staying resilient, despite aerospace delays."

--Joe Innace, joseph_innace@platts.com

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