As we enter the summer months, the market trend for flat rolled products is sizzling hot with no signs of cooling down any time soon.
Domestic prices for hot rolled products have gone up by at least $1.50 cwt. ($33 /mt or $30 /nt) since our last report, with most hot rolled offers now ranging from approximately $31.00 cwt. to $32.00 cwt. ($683 /mt to $705 /mt or $620 /nt to $640 /nt). Cold rolled offers have increased by around $0.50 cwt. ($11 /mt or $10 /nt), now ranging from $35.50 cwt. to $36.50 cwt. ($783 /mt to $805 /mt or $710 /nt to $730 /nt).
Domestic flat rolled producers across the board have increased their July prices by approximately $30 /nt to $50 /nt to account for strong demand as well as rising raw material costs. Shredded
scrap is up $25 /ton to $30 /ton from the month previous, and auto bundles are up $35 /ton from the month previous. The cost of
alloys, which are used for specialty steels, is also rising, increasing the cost of
galvanized products. HDG coils now go for approximately $36.50 cwt. to $38.50 cwt. ($805 /mt to $849 /mt or $730 /nt to $770 /nt).
While the market is expected to remain strong through the summer, we may see some softening in the fourth quarter of the year with some possible price slippage of approximately $20 /nt.
For now, domestic prices are still on the rise, and while some buyers are resisting these higher prices, the majority of buyers will most likely have to accept them, as availability is relatively scarce, and import prices are still on the rise. US prices are no longer the highest in the world, so buyers will have a hard time finding cheaper foreign supplies in the next couple months. Currently, the US market is absorbing record amounts of flat rolled imports at near-domestic pricing. Import prices are expected to climb another $30 /nt to $40 /nt in July, and in accordance with this strong market trend, consumers will most likely accept the price hike.
Current offers for import hot rolled coils have gone up by about $1.50 cwt. in the past two weeks, now ranging from about $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 imports now around $34.50 cwt. to $35.50 cwt. ($761 /mt to $783 /mt or $690 /nt to $710 /nt) FOB loaded truck, US Gulf and New England ports.
Preliminary census data from the US government shows that in May 2006, the top five countries from which the US imported hot rolled sheet were:
Egypt, at 70,812 mt;
Korea, at 70,274 mt;
Australia, at 54,326 mt;
Russia, at 52,882 mt; and
Canada, at 35,632 mt,
During the same time period, the top five countries from which the US imported cold rolled sheet were:
Canada, at 24,189 mt;
China, at 22,868 mt;
Brazil, at 21,442;
Taiwan, at 20,878 mt; and
Mexico, at 14,979 mt.
The pricing trend for flat rolled imports is still strongly up and will remain so as long as domestic supplies remain scarce and demand stays high.