Sources close to SteelOrbis have confirmed that US flat rolled steel prices have continued to trend soft since our last report a week ago, adding that yesterday’s price increase announcements from Nucor and Cleveland Cliffs’ may be more of an attempt to prevent prices from slipping further, as opposed to actually getting prices up.
As of today, US HRC prices are trending at $40-$41 cwt. ($882-$904/mt or $800-$820/nt), FOB mill, against $41-$43cwt. ($903-$948/mt or $820-$860/mt) FOB mill, a week ago. Similar to previous weeks, deals below this range have been heard based on tonnage.
Whether yesterday’s price increases, in which Nucor announced a new minimum HRC base of
$41.25 cwt. ($909/mt or $825/nt), and Cliff’s announced a new minimum base of $42 cwt. ($926/mt or $840/nt), FOB mill, will be accepted, remains uncertain.
“The Nucor announcement is underwhelming, because $825/nt isn’t a huge move,” one source said, adding that he believes the announcements are an attempt to stabilize the market. “Announce an increase and hopefully keep the spot market up while doing deals much lower and building back a backlog.”
(For example, another source said he’s aware of HRC deals that have been done at, and in some cases, below $37.50 cwt. ($827/mt or $750/nt) based on volume.)
“If successful, the longer lead times then drive more order entry and give prices a chance to go up,” the first source continued.
A second source said he also agrees that the flat rolled steel market may be on the verge of stabilizing.
“While demand isn’t through the roof it is steady. The last several weeks of falling pricing has done what it typically does and puts customers on the fence with buying only what they needed,” he said. “This drove their inventory down now they are in a buy situation and Nucor’s price increase today should get many off the fence fearing they will or have missed the bottom.”
Looking to HDG and CRC prices, those have softened modestly in the past week from $54-$56 cwt. ($1,191-$1,235/mt or $1,080-$1,120/nt), FOB mill, last Friday, to $54-$55 cwt. ($1,191-$1,213/mt or $1,080-$1,100/nt), FOB mill, today.
A source who deals with HDG said they believe that mills will have a hart time convincing spot buyers that prices need to go up considering that primes are down anywhere from $60-$70/gt this month, depending on the region.
“They are essentially forcing the issue without justification,” the source said, adding they also believe the market will stabilize by the end of the month. “It seems [mills’] working theory is that we can either buy it or not.”
Current market demand has been broadly described as “flat, not great, but also not bad, which I think holds for the market in general, even beyond just flat rolled.”