The US flat rolled market continued its pattern of softening this week with price declines and heightened anxiety about when the market will turn around, or at least hit bottom.
Hot rolled coil (HRC) and cold rolled coil (CRC) spot offers from domestic mills have declined by about another $3.00 cwt. ($66 /mt or $60 /nt) since our report last week and prices now range from $35.00 cwt. to $37.00 cwt. ($772 /mt to $816 /mt or $700 /nt to $740 /nt) ex-mill in the Midwest. As a result, spot market pricing is now even closer to the contract prices of $31.00 cwt. to $32.00 cwt. ($683 /mt to $705 /mt or $620 /nt to $640 /nt), established by Nucor's raw materials surcharge (RMS) decrease for October contract customers a couple weeks ago. Prices are still said to be "all over the place" as the downward trend continues. Based on recent declines in the scrap market, SteelOrbis has been told by one trader that, "domestic HRC prices could be in the high $20s cwt. within a couple weeks."
After this week's decrease, most domestic CRC offers now range from $40.00 cwt. to $42.00 cwt. ($882 /mt to $926 /mt or $800 /nt to $900 /nt).
Busheling prices have also continued to decline, dropping another $25 /long ton (lt) this week, bringing the monthly decrease to $355 /lt. While there is still a lot of buyer hesitancy, as scrap prices will probably decrease more before they hit bottom, prices will not decline forever. The bottom could be near. Prices are approaching bare minimum "at cost" levels for mills, under which they will not be able to lower prices without losing money.
On the import side, offers also continue to decrease, but there is still very little buying activity.
Mexico is offering HRC to the US at the border crossing in the range of $35.00 cwt. to $38.00 cwt. ($772 /mt to $838 /mt or $700 /nt to $760 /nt). One trader told SteelOrbis, "No one is paying over $40 cwt. ($882 /mt or $800 /nt) right now." Mexico is attempting to attract just about any business possible by offering CRC at about $2.00 cwt. ($44 /mt or $40 /nt) below the US domestic range. Mexico's CRC offers registered a substantial $5.00 cwt. ($110 /mt or $100 /nt) decrease from last week, with most offers now ranging from $38.00 cwt. to $40.00 cwt. ($838 /mt to $882 /mt or $760 /nt to $800 /nt)
Russia is staying on pace with Mexico, offering HRC in the range of ($772 /mt to $838 /mt or $700 /nt to $760 /nt) duty-paid FOB loaded truck in US Gulf ports.
China continues to decrease their offering prices, and is now offering at about $42.00 cwt. to $45.00 cwt. ($926 /mt to $992 /mt or $840 /nt to $900 /nt) duty-paid, FOB loaded truck in US Gulf or West Coast ports. It is likely that China will lower their range again in the coming weeks to stay competitive with other import offers.
New offers from Brazil and India are not out yet.