The domestic flat rolled market has finally peaked, and the pricing trend is now flat for the rest of the year.
Domestic mills were able to get the announced $20 /nt ($22 /mt) price increase for the most part, but September orders are booked at the same levels as August. We will possibly see some rollover of August increases into September, but it is unlikely that the market will register an additional increase for the remainder of the year.
The flat rolled market as a whole is being affected by the slowdown in the residential
construction industry (which has to do with higher interest rates), and the slowdown of the economy in general. However, these patterns are largely seasonal and don't necessarily have any long-term implications.
The hot rolled market is still relatively stable, as antidumping orders have restricted import competition. However, there is weakness in the cold rolled and
galvanized markets, as inventories have grown. While these products were in high demand during the earlier half of the year, distributors have had the chance to rebuild their inventories and are no longer looking to buy as much quantity, especially not when steel prices are at historically high levels. Experts anticipate that there will be some special price reductions for certain customers in the fourth quarter, as mills will want to move tonnage, especially for cold rolled. These price reductions could be as much as $40 /nt ($44 /mt) for large tonnage buyers. For most buyers, domestic prices should remain flat until the end of the year.
After registering a $20 /nt increase since August, most domestic hot rolled offers in the market now range from $32.00 cwt. to $33.00 cwt. ($705 /mt to $728 /mt or $640 /nt to $660 /nt) FOB mill. Cold rolled offers range from $36.50 cwt. to $37.50 cwt. ($805 /mt to $827 /mt or $730 /nt to $760 /nt) FOB mill.
The import pricing trend is still slightly down, as mills are lowering prices to reflect the softening flat rolled market worldwide. Chinese prices in particular have softened, and mills are looking for cold rolled orders. Like the domestic hot rolled market, the import market for hot rolled is still stable, though such is not the case for cold rolled.
Galvanized offers, many of which come from
India and
Taiwan, have also begun to come down, by as much as $40 /nt from the previous month's levels.
Current hot rolled offers on the market now range from $30.00 cwt. to $31.00 cwt. ($661 /mt to $683 /mt or $600 /nt to $620 /nt) FOB loaded truck, US Gulf ports. Cold rolled offers have softened to a range of $33.00 cwt. to $34.00 cwt. ($728 /mt to $750 /mt or $660 /nt to $680 /nt).