The US flat rolled steel market is still soft, sources note, but a growing number of sources say they believe that prices are at or near the bottom.
Similar to last week, US HRC prices are trending at $36.50-$38.50 cwt. ($805-$850/mt or $730-$770/nt), FOB mill, for large-tonnage buyers, although smaller sized-transactions are taking place closer to $40 cwt. ($882/mt or $800/nt).
“If we’re not at the bottom yet, we’re close,” a source said.
In terms of HDG and CRC prices, are down by approximately $1.00 cwt. ($22/mt or $20/nt) week-over-week, and are now trending at $51-$54 cwt. ($1,124-$1,191/mt or $1,020-$1,080/nt), FOB mill, although deals below $50 cwt. ($1,102/mt or $1,000/nt), if not slightly below that, have been heard for volume buyers.
“The one thing I can say [about the market right now] is that I see customers inquiring / ordering further out than normal,” a service center source wrote, adding that some of their customers are already looking into order placement for the second half of the year. “They sense the bottom and are trying to scrounge up cheap deals before it goes the other way.”
A third source also agrees the market is at or close to the bottom. He believes that prices are less likely to stabilize at current levels, and that instead, mills will instead try push prices higher much sooner than later.
“Based on the number of and size of the inquiries we are receiving, flat rolled inventories appear to now be pretty lean,” he noted. “That said, inventory replenishment should be right around the corner. Recent history suggest that the mills will be aggressive when pushing prices upwards.”
What happens in the short term, a final source said, is the big question.
“Everyone is sure we are at or close to bottom, but will it be a U-shaped or V-shaped [bottom and price recovery]? I personally believe we’ll see price increases stick when scrap and [finished steel import offers] start moving up,” he said. “So far, we do not see any movement there.”
Yesterday, SteelOrbis reported that scrap market players believe that April scrap prices are likely to settle at sideways to slightly down from March settled levels.
Others also believe that scrap prices next month will be a bellwether in terms of what will happen with sheet prices in the next 30 days.