US flat rolled buyers are starting to realize that the bottom of the market may be just around the corner, if it isn't here already.
If the bottom has yet to arrive, buyers predict that any further price drops will be minimal and probably not significant enough to risk waiting for the prices to drop further. Because of the capacity cuts, the reversal of the markets could also be quick, and this may be the best time to lock in long-term deals at low prices. Busheling scrap prices have firmed up and increased handsomely, which may suggest that scrap-based Nucor will be motivated to move prices up in the upcoming months.
But for now, most domestic hot rolled coil (HRC) spot prices remain unchanged from last week. This is the first week that the market has not seen a noticeable price decrease since October. HRC prices are in the range of approximately $24.00 cwt. to $27.00 cwt. ($529 /mt to $617 /mt or $480 /nt to $560 /nt) ex-mill in the Midwest. Mills still could be tempted with large enough orders at prices below this level, however.
Most domestic cold rolled coil (CRC) spot prices also did not change from last week and continue to range from about $29.00 cwt. to $31.00 cwt. ($639 /mt to $683 /mt or $580 /nt to $620 /nt).
Despite the steady prices, overall, flat rolled product demand remains very low and while prices may not decline much further, if at all, orders are expected to remain weak. Combine the lack of demand over the past couple months with the holiday season which is usually a slower time of year for bookings, and most buyers would be hard-pressed to expect any price increases before the end of December.
Nonetheless, more buyers are expressing interest in booking long term deals to lock-in current rates over three to six month periods, as extending lead times indicate to buyers that prices will most likely increase rather than decrease over the next several months.
Most import price offerings remained at last week’s levels, which are close to domestic offers. With long lead times and no significant cost benefit compared to domestic, most of these import offers are not attractive enough to most flat rolled buyers in the US.
Brazil’s CRC price offerings remain unchanged from last week, and Brazil remains one of the highest of the active foreign countries offering CRC to the US. Most offers range from $31.00 cwt. to $33.00 cwt. ($683 /mt to $728 /mt or $620 /nt to $660 /nt) duty-paid, FOB loaded truck in US Gulf ports.
India’s, China’s and Mexico’s import CRC offers also all remained consistent from last week and continue to be in the range of about $29.00 cwt. to $31.00 cwt. ($639 /mt to $683 /mt or $580 /nt to $620 /nt). India’s and China’s offers are duty-paid, FOB loaded truck in US Gulf ports, while Mexico’s offers are delivered to the US at the border crossing.
Meanwhile, Mexico’s and Russia’s HRC offers also trended sideways from last week and remain at about $1.00 cwt. ($22 /mt or $20 /nt) less than the high end of domestic offers, at about $24.00 cwt. to $26.00 cwt. ($529 /mt to $573 /mt or $480 /nt to $520 /nt). Mexico’s offers are delivered to the US at the border crossing, while Russia’s offers are duty-paid FOB loaded truck in US Gulf ports.
Licensing data from the US Steel Import Monitoring and Analysis System (SIMA) show that the total amount of import HRC arriving in the US during November was 128,963 mt, which is 85,980 mt or about 40 percent less than the 214,943 mt imported in October. The largest quantities of import HRC in the November period came from: South Korea, at 55,913 mt; Canada, at 25,582 mt; Mexico, at 12,992 mt; and Netherlands, at 11,834 mt.
Total tonnages of import CRC arriving in the US during November were 70,326 mt, which is 36,958 mt, or about 34 percent more than the 107,284 mt imported in October. The largest quantities of import CRC in the November period came from: Canada, at 15,002 mt; Netherlands, at 14,604; and China, at 13,022.