Little stopping US domestic flat rolled price erosion

As lead times shrink and buyers grow increasingly reluctant to place orders, US domestic flat rolled spot prices are slowly drifting lower. For hot rolled coil (HRC), some sources indicate receiving an order as rapidly as one week after placing it, as mills face lackluster order books. Customers have orders to place, according to SteelOrbis sources, as demand levels have remained stable. But as in in the last couple weeks, because of expectations that prices could still fall further, those orders are only being placed at the last minute. The current dynamic, in addition to a rising raw steel production rate on a week-on-week basis, has made some mills desperate enough for orders to make major price cuts.

Since last week, HRC spot prices have fallen $1.00 cwt. ($22/mt or $20/nt) on the high end and are now between $29.00-$30.00 cwt. ($639-$661/mt or $580-$600/nt) ex-Midwest mill. While sub-$30.00 cwt. orders were few and far between a week ago, they have become more common in the last week. Cold rolled coil (CRC) spot prices have also slipped $0.50 cwt. ($11/mt or $10/nt) and can now be found between $34.50-$35.50 cwt. ($761-$783/mt or $690-$710/nt) ex-Midwest mill. Domestic CRC spot prices are too similar to current Chinese CRC futures offers of $34.50-$35.50 cwt. ($761-$783/mt or $690-$710/nt) DDP loaded truck in US Gulf ports, so US buyers are primarily sticking to domestic material for the time being.

*DDP loaded truck in US Gulf ports
**DDP loaded truck delivered into Houston