US domestic flat rolled prices on the move again

Flat rolled mills have once again raised spot prices, despite the decrease in February scrap prices.

While some Midwest mills have been taking orders for April delivery for a couple of weeks now, two major mills on the West Coast just opened April order books earlier this week, raising prices to approximately $43.00-$45.00 cwt. ($948-$992/mt or $860-$900/nt) for hot rolled coil (HRC) and $48.00-$50.00 cwt. ($1,058-$1,102/mt or $960-$1,000/nt) for cold rolled coil (CRC)-a $3.00 cwt. ($66/mt or $60/nt) increase from March shipment prices. The lack of competition (there are only three flat-rolled mills on the West Coast) is boding well for them-March order books filled up quickly in mid-January, and April order books are expected to be profitable for producers as well.

Prices are also rising in the Midwest, as AK Steel led the pack once again Thursday and hiked flat-rolled tags another $2.50 cwt. ($55/mt or $50/nt) effective immediately with all new orders. The increase puts the mill's official prices for HRC and CRC at $45.00 cwt. ($992/mt or $900/nt) and $50.00 cwt. ($1,102/mt or $1,000/nt), respectively. Whether this increase will be fully reflected in spot prices however, remains to be seen-most distributors are already sitting on sizeable inventories through Q1.

For now, no other flat-rolled mills have made any announcement, and so the most commonly reported spot prices for HRC are $40.00-$42.00 cwt. ($882-$926/mt or $800-$840/nt) ex-Midwest mill with an increasing number of orders being placed at the higher end of the range, but most still being placed at around $40.00 cwt. CRC spot prices are currently around $45.00-$47.00 cwt. ($992-$1,036/mt or $900-$940/nt) ex-Midwest mill-both HRC and CRC spot prices have increased $1.00 cwt. ($22/mt or $20/nt) since last week in response to late-January increase announcements. And as spot prices begin to rise, so do predictions that other mills will follow AK's Steel's lead and issue a price increase of their own sooner rather than later.

One factor that continues to help US mills implement their increases is a lack of offers from offshore mills. While Mexican mills continue to competitively offer HRC to US buyers, little else is available. Russian mills, which had been offering HRC in December and January, have not come out with any new offers, while Chinese mills have also not presented US traders with any new CRC offers. However, CRC prices have increased in the Chinese domestic market following the Lunar New Year holiday, and so once new offers do become available, they will be far too high for any serious consideration or large-tonnage booking.