A handful of US domestic flats mills have followed through on a $40/nt price increase for hot and cold rolled coils (HRC and CRC, respectively) since our last report a week ago, with those who have not yet announced October pricing expected do so in the very near future.
What's good news for buyers, however, is that it's believed that those who purchase before the end of the current week will still be able to buy HRC and CRC in ranges previously reported (see chart below).
"My guess is that the people who absolutely need it will buy it this week, the mills will happily fill their order books, and it won't be until next week that the big stand-off will start," said one purchasing manager.
The big question, though, is how much steam the announcement will actually have, especially considering that the previous $40/nt increase was only absorbed by approximately $10/nt to $20/nt. At that point in time, order activity still had not caught up with production levels and sales people weren't all that shy about "wheeling and dealing" to pad mills' order books.
Unfortunately for mills- the gap between supply levels and market demand has yet to really narrow- which has more than a few people wondering how well the increase will go over. Lead times have trended neutral (approximately three weeks for HRC, four for CRC), and until they begin to stretch out into nine-weeks plus, buyers will continue to have an advantage at the negotiating table.
For now, the domestic trend is neutral, with more clarity not expected until after the upcoming US Labor Day holiday weekend.
Shifting away from domestic offerings, Mexican HRC has remained neutral since our last report a week ago, with offers of CRC still fairing relatively quiet. China has held neutral on their CRC pricing, and it was learned that Brazil, previously rumored to have sold quite a few tons of CRC recently, is still putting out offers to select buyers.
Cwt. Metric Ton (mt) Net ton (nt) Change from last week US domestic HRC $28-29 $617 - $639 $560-$580 neutral CRC $33-$34 $728 - $772 $680-$700 neutral Mexican HRC $29-$30 $639-$661 $580-$600 neutral CRC --- --- ---- ---- Chinese CRC $38-39 $838 - $860 $760-$780 neutral Brazilian CRC $34.50-$35.50 $761-$783 $690-$710 newly offered
*Mexican offers are FOB loaded truck US border states.
**Chinese and Brazilian offerings are duty-paid FOB loaded truck, US Gulf ports.