Shares of metal manufacturers were mixed Wednesday after an analyst noted prices were rising despite what she sees as a small improvement in demand for steel products.
In a research note, Steel Market Intelligence analyst Michelle Applebaum said she believes the price increases occurred because of higher raw material costs, seasonal factors and low domestic prices.
"The increase is coming off of what we think is a relatively small pickup in demand," Applebaum wrote. "It's the smoke that is driving the surge, not even the fire."
AK Steel Holding Corp. said late Tuesday it would increase spot market prices for carbon steel products by $30 per ton for new orders accepted for shipment beginning Jan. 1.
The increases are in addition to previously announced hikes of $20 per ton for carbon hot rolled products and $30 per ton for carbon cold rolled and coated products effective Jan. 1.
Nucor Corp. and Severstal NA of Russia also have announced price hikes, Applebaum said.
"Because the supply pipeline is so empty and lead times for production increases aren't instantaneous, the pricing environment is being whipsawed," she wrote.
In afternoon trading, shares AK Steel rose 73 cents, or 3.8 percent, to $20.02; United States Steel Corp. rose $1.50 or 3.4 percent, to $45.73; Nucor was up 40 cents to $42.71 and Century Aluminum Co., was up 8 cents to $10.52.
Alcoa Inc. shares fell 4 cents to $12.83 and Alumina Ltd. fell 2 cents to $5.57.