The domestic pricing trend for flat rolled products is still stable, and although prices have not changed much in the last four to five months, increases are now on the horizon.
With strong domestic demand and increases in zinc prices, offers for certain flat rolled products are expected to rise by $15 /nt to $25 /nt in May.
Currently, hot rolled is still ranging from $27 cwt. to $28 cwt. ($595 /mt to $617 /mt or $540 /nt to $560 nt), down $0.50 cwt. ($11 /mt or $10 /nt), and cold rolled ranges from $31.50 to $32.50 cwt ($694 /mt to $717 /mt or $630 /nt to $650).
Galvanized products are fetching $33 cwt. to $34 cwt. ($728 /mt to $750 /mt or $660 /nt to $680 /nt). Prices are $3.00 cwt. to $4.00 cwt. higher on the West Coast.
The market is also staying strong because flat rolled leaders
US Steel, AK Steel, and
Nucor have raised their surcharges for flat rolled products to reflect the increase in busheling
scrap prices.
Nucor made the decision this week to keep spot prices for sheet stable, but it has been reported that the company will raise transaction prices for contract buyers by the same amount of the
scrap increase.
At the Metals Service Center Institute's Carbon Steel conference last week, Michael Martin, sales VP at Mittal USA, said he expects domestic demand for flat rolled products to remain strong, especially for the first half of '06 when the
US economy will be the most robust. He noted that an increase in auto
production and increases in
production of flat rolled-related products like capital goods and machinery will also create a pull on the market.
Overall, the flat rolled market trend is slightly up because of strong demand as well as increases in
scrap and zinc, though some speculate that these increases may be short-lived.
Below are sizes and grades for base prices:
For hot rolled:
0.083" - 0.500" thick x 48" - 64" wide for grades C1006, C1008, C1010
For cold rolled:
0.0260" x 0.100" thick x 48" - 61.5" wide for grades C1006, C1008
Narrow and thinner materials and special grades pack extras.
The import flat rolled market is also hot, especially for hot rolled coils.
Flat rolled prices in
China and the Black Sea region are going up, and long-term price increases are expected to occur by June or July.
Dieter Mueller, VP of hot and cold rolled product sales for MAN Ferrostaal, believes 2006 will see increases in Chinese prices, which will carry over to
Taiwan,
Malaysia, and Vietnam, hopefully closing the pricing gap in '06.
John Ferriola, executive VP of
Nucor, also does not see cheap Chinese imports as much of a threat because despite an anticipated increase in imports of flat rolled products to the
US in '06, our economy is strong enough to absorb them.
Flat rolled expert Michelle Applebaum echoed this sentiment, as she expects
China to eventually increase its domestic appetite for steel. Her research shows that Chinese
consumption growth has outpaced capacity growth, and she expects
China to go back to its 1994 state of 15 percent imports by 2010.
There are still many who believe that the pressure of cheaper import prices will eventually bring
US prices down, but right now, they seem to be in the minority.