The incredible rally of flat rolled market has continued in the past two weeks with both domestic and import prices strengthening in large steps.
Domestic prices for hot rolled coil have improved by about $1.00 cwt. ($22 /mt or $20 /nt) in the past couple weeks, with offers now ranging from $29.50 cwt. to $30.50 cwt. ($650 /mt to $672 /mt or $590 /nt to $610 /nt) FOB mill. Cold rolled offers have improved by $2.00 cwt. ($44 /mt or $40 /nt) in the past two weeks, now ranging from $35.00 cwt. to $36.00 cwt. ($772 /mt to $794 /mt or $700 /nt to $720 /nt) FOB mill.
The domestic pricing trend is still strongly up, as we are seeing sustained strong demand for sheet from the
automotive,
manufacturing, and housing sectors. Mills are full, booked up for the next several months. Inventories are very low because domestic mills are still practicing very restrained
production. This short supply situation is leading domestic consumers to purchase an increasing number of imports. Still, the influx of imports, of hot rolled coil in particular, is not hurting domestic prices. Increasingly higher import prices coupled with the US' voracious appetite for flat rolled products are keeping domestic prices up. The market is still awaiting another price increase in June, although no one is sure exactly how much the increase will be. Most estimates range from $20 /nt to $40 /nt ($22 /mt to $44 /mt or $1.00 cwt. to $2.00 cwt.) Perhaps the best indication yet is the AK Steel's base price increase announcement this week of $50 /nt ($55 /mt or $2.50 cwt.). They may not get the entire increase, effective May 15, but then again, they just might.
Looking past June, experts predict that domestic prices will remain stubbornly high for awhile. We usually see some seasonal softening in July, but at this point it looks like the upward pricing trend could extend all the way into September.
Import offers for flat rolled are still on the rise, with hot rolled prices increasing $0.50 cwt. ($11 /mt or $10 /nt) since last week, now ranging from $28.50 cwt. to $29.50 cwt. ($628 /mt to $650 /mt or $570 /nt to $590 nt) FOB, loaded truck, in US Gulf ports. Cold rolled offers have increased by $2.00 cwt. with offers now ranging from $33.00 cwt. to $34.00 cwt. ($728 /mt to $750 /mt or $660 /nt to $680) FOB, loaded truck, in US Gulf ports
Because of the high demand and the strength of the home markets for flat rolled in
Europe and
China, orders placed now will not arrive until August or September. The market is extremely tight and the pricing trend for imports remains strongly up.
US import statistics show that the top five countries the US imported hot rolled sheet from in March 2006 were:
Egypt, at 108'375 mt;
Korea, at 84'326 mt;
Turkey, at 58'010 mt;
Canada, at 48'168 mt; and
Australia, at 47'503 mt.
The top five countries the US imported cold rolled sheet from in March 2006 were:
Brazil, at 64'146 mt;
China, at 45'027 mt;
Taiwan, at 24'432 mt;
Russia, at 22'282 mt; and
Canada, at 21'860 mt.