Price deterioration in US flat rolled market accelerates

As mills grow hungrier for orders and US buyers maintain their wait-and-see method of buying, domestic spot prices are sinking quickly. Over the past week, the number of extremely low-priced deals has grown substantially. The general spot range for hot rolled coil (HRC) has fallen $0.50 cwt. ($11/mt or or $10/nt) since last week to $30.00-$31.00 cwt. ($661-$683/mt or $600-$620/nt) ex-Midwest mill. However, while mills are attempting to still collect the high end of the range for smaller orders, larger customers are already paying sub-$30.00 cwt. ex-mill prices. But even with $29.00 cwt. ($639/mt or $580/nt)-level offers available from a number of producers, most distributors still aren't buying anything that isn't immediately needed as HRC lead times remain at about two weeks and prices are only expected to fall further in the next couple weeks.

How much longer the decline will persist remains uncertain for the time being, but with scrap prices now expected to fall anywhere from $20-$40/lt in October, depending on grade and range, it is all-but-guaranteed that the first half of October will reflect a downward trend. And while the US market remains weak, so will import interest, especially now that it appears import offers from China have stabilized. Traders indicated that while prices could fluctuate up or down in the near future, they aren't likely to deviate much, so Chinese cold rolled coil (CRC) offer prices to the US are expected to remain at current levels--$34.00-$35.00 cwt. ($750-$772/mt or $680-$700/nt) DDP loaded truck in US Gulf ports--for some time.

**DDP loaded truck delivered into Houston