The US domestic flat rolled market has been soft for over a month, and while mills had managed to keep prices relatively stable throughout September and into early October, most offers have slightly declined from last week.
Most spot offers for domestic hot rolled coils (HRC) have dropped by about $1.00 cwt. ($22/mt or $20/nt) since last week are now ranging from $26.00 cwt. to $27.00 cwt. ($573/mt to $595/mt or $520/nt to $540/nt) ex-Midwest mills, with some chance of finding deals even below this range for significant tonnage. HRC is trending a little more sharply downward that other flat rolled products, primarily due to the sluggishness of the pipe and tube markets.
Meanwhile, most CRC offers also declined by about $1.00 cwt. ($22/mt or $20/nt) from last week and currently range from $31.00 cwt to $32.00 cwt. ($683/mt to $705/mt or $620/nt to $640/nt) ex-Midwest mills. CRC remains, partly due to tighter inventory supply, the strongest and most requested flat rolled product in the US market. However, not much tonnage of any flat rolled product is being sought after right now, as most buyers, aware of the seasonal downturn in demand that usually characterizes the last two months of the year, are hunkering down and trying to keep inventories as slim as possible through the end of the year.
As a result, US mills are cutting some deals and are likely to begin decreasing production again. Inventory levels at the service center level have also slightly increased recently as shipments have softened again. According to the latest data from the Metals Service Center Institute (MSCI), monthly flat rolled inventory at US service centers increased from 2.76 million nt in August to 2.92 million nt in September, marking the first monthly inventory increase since August 2008.
Looking forward, the US flat rolled market is likely to experience another $1.00 cwt. to $2.00 cwt. ($22/mt to $44/mt or $20/nt to $40/nt) decrease heading into December, mostly due to the expectation that US scrap prices could fall by a similar margin over that timeframe. Many distributors have expressed to SteelOrbis that they believe flat rolled price decreases will not carry into the New Year, though prices probably won't begin ticking upwards again before the end of the first quarter.
On the import side, activity is quiet, mostly because US mills are getting more aggressive in offering some discounts again; however, prices are likely to come down in a few weeks once US mills make their next official price move.
HRC offers are almost non-existent. What few Russian offers that were out there in previous weeks appear to have fallen off the radar, and although Mexico continues to be the main source offering HRC to the US, with most offers ranging from approximately $25.00 cwt. to $26.00 cwt. ($551/mt to $573/mt or $500/nt to $520/nt) delivered to the border crossing, Mexican mills have lost their aggressiveness, perhaps content to see how low US mills will go down first.
Meanwhile, although there are more sources offering CRC to the US, activity is also very quiet and prices have remained neutral from last week. Most Mexican offers remain at about $30.00 cwt. to $31.00 cwt. ($661/mt to $683/mt or $600/nt to $620/nt) delivered to the border crossing, while Brazilian offers remain at around $34.00 cwt. to $36.00 cwt. ($750/mt to $794/mt or $680/nt to $720/nt) duty-paid, FOB loaded truck in US Gulf ports. The most prevalent Asian CRC offers, from India and China, have also trended neutral from last week, at around $34.00 cwt. ($750/mt or $680/nt) duty-paid, FOB loaded truck in US Gulf ports.
Item | US Domestic Spot Price | From Last Week | From Last Month | Pricing Trend | Comments | |
US domestic HRC | $26.50 cwt. ($584 /mt) | down $1.00 cwt. ($22 /mt) | down $1.50 cwt. ($33 /mt) | L | ex-mill Midwest | |
US domestic CRC | $31.50 cwt. ($694 /mt) | down $1.00 cwt. ($22 /mt) | down $2.50 cwt. ($55 /mt) | L | ex-mill Midwest | |