Item | US Domestic Spot Price (avg.) | From Last Week | From Last Month | Pricing Trend | Comments | |
$26.00 cwt. ($573/mt) | up $1.00 cwt. ($22/mt) | up $2.00 cwt. ($44/mt) | J | ex mill Midwest | ||
$31.00 cwt. ($683/mt) | up $1.00 cwt. ($22/mt) | up $2.00 cwt. ($44/mt) | J | ex mill Midwest | ||
Nucor's $1.50 cwt. ($33 /mt or $30 /nt) price increase on October shipments of hot rolled coil (HRC) and cold rolled coil (CRC) made it clear that the US flat rolled market will continue its upward price trend into the fourth quarter. However, questions still remain for the balance of the year.
For now, HRC and CRC spot offers continue their upward momentum, each increasing by approximately $1.00 cwt. ($22 /mt or $20 /nt) over the past week. Most domestic HRC spot offers now range from approximately $25.00 cwt. to $27.00 cwt. ($551 /mt to $595 /mt or $500 /nt to $540 /nt) ex-Midwest mills. Meanwhile, domestic CRC spot offers are in the range of $30.00 cwt. to $32.00 cwt. ($661 /mt to $705 /mt or $600 /nt to $640 /nt)ex-Midwest mills.
While spot offers for most flat rolled coil products continue firming up in line with the series of price hikes US mills have announced since May, CRC remains a hotter commodity than HRC, which is a cause for concern from some distributors, as HRC is the base coil product. However, overall US flat rolled activity is the best it has been all year. According to the latest Metal Service Center Institute (MSCI) monthly shipment and inventory report, daily shipments of flat rolled tonnage improved from June to July, from 66,500 nt to 68,700 nt, and monthly shipments improved from 1.46 million nt and 1.51 million nt. End of month inventory also shrunk from 3.03 million nt in June to approximately 2.8 million nt in July, while the average months of inventory on hand decreased to under 2.0 months in July for the first time in over two years, (to 1.8 months from 2.1 months in June). While US service centers had been concentrating on de-stocking inventory as much as possible throughout the year, 1.8 months on hand is extraordinarily low and most service centers are now in re-stocking mode.
At the same time, questions have arisen over the past several weeks regarding whether the flat rolled market will be able to maintain its strength for the duration of the fourth quarter, especially as production has begun to ramp up. The confidence level from many distributors is beginning to wane as many believe that millswill have a difficult time holding onto their current prices as demand is still down compared to years past, and the holiday season of November and December is typically the slowest part of the year.
Nevertheless, current conditions are still strong and re-stocking activity is expected to continue its up-tick over at least the next 60 days. At that time, domestic mills are just hoping there will be enough momentum to avoid any price fall-back heading into 2010.
On the import side, traders continue to see virtually no offers for HRC and very limited CRC activity. There were limited CRC offers seen about a week ago from India and China for around $34.00 cwt. ($750 /mt or $680 /nt) duty-paid, FOB loaded truck in US Gulf ports; however, there is no US interest in buying import CRC at this high level. For the most part, most foreign sources have been experiencing strong up-ticks in their respective domestic flat rolled markets and are content continuing to wait and see how high US domestic mills will raise prices before entering the market again. Interest in import offers will remain extremely quiet over at least the next several weeks, as customers are settling their end-of-the-year books.