That reverses a six-month slide in U.S. steel prices caused by too much steel on the market, both in the U.S. and globally.
The industry has been buried with 200 million tons of excess capacity due in large part to the weak European economy and slowing growth in China.
The speed of the recent U.S. price increase has spooked some steel buyers. "When prices go up fast like this, they often go down fast, too," said James Barnett, president of Grand Steel Products Inc., a Wixom, Mich., company that buys steel from mills and, after some processing and cutting, sells around 45,000 tons a year to customers ranging from the automotive industry to shelf makers.
Steel buyers are worried they might get stuck with inventory they are overpaying for now and will have to sell at a loss if prices return to levels before the recent increase, said Mr. Barnett. He predicts prices will fall back to around $600 a ton in the fourth quarter as imports rise, the blast furnaces are repaired and the labor issue is resolved, and more steel is being made available in the U.S. market.
Part of the price increase is seasonal: Prices typically go up as steel-rich summer construction gets going. But prices are above even their level a year ago of $599 per ton. It isn't clear whether the increases will stick, either, once the temporary production problems are resolved, although the automotive and gas- and oil-drilling markets are still strong.
One other wild card: This week, a group of U.S. steelmakers filed a trade complaint to the International Trade Commission over imports from nine countries of pipes, tubes and other kinds of steel used in the energy market, known as "oil country tubular goods."
The complaint alleges that steelmakers in India, Philippines, Saudi Arabia, South Korea, Taiwan, Thailand, Turkey, Ukraine and Vietnam benefited from unfair subsidies that allowed them to sell below cost in a way that injured U.S. producers.
The complaint could be a sign that there will be more such actions, which tend to limit imports even before they are decided and therefore bolster prices. But if the complaint fails, imports could rise, exerting downward pressure on steel prices.
A decision is due within six months. While no duties can be imposed before then, importers typically reduce shipments when they expect a trade complaint to be filed, which was the case before the July filing.
In the first four months of 2013, U.S. steel imports were down 17.1% from a year earlier, to 10.6 million tons. Imports mainly declined in the period because of lower domestic steel prices.
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