After steady increases over the last few months, it appears that US flat rolled spot prices have begun to slow down and could be leveling out, as buyers are becoming extra cautious with purchases to avoid having over-priced excess inventory at the end of Q4.
Nevertheless, West coast flat rolled steel producer, California Steel Industries Inc. (CSI), informed customers late last week that they were raising their November and December transaction prices by $0.75 cwt. ($16 /mt or $15 /nt) on hot rolled coil (HRC) and $1.50 cwt. ($33 /mt or $30 /nt) on cold rolled coil (CRC) due to increased raw material costs and stronger market conditions.
However, distributors do not necessarily believe that some of the larger mills will announce further increases throughout the rest of the year. HRC spot offers have begun to show a little tentativeness and the range of most offers widened a bit of the past week by about $1.00 cwt. ($22 /mt or $20 /nt) on the lower end, and are now in the general range of $27.00 cwt. to $29.00 cwt. ($595 /mt to $639 /mt or $540 /nt to $580 /nt) ex-Midwest mills. Meanwhile, most domestic CRC spot offers range approximately $33.00 cwt. to $35.00 cwt. ($728 /mt to $772 /mt or $660 /nt to $700 /nt) ex-Midwest mills.
CRC is the most desired flat rolled product right now and the upper range of offers have gone up by $1.00 cwt. duo to less availability in the market. However, HRC remains the weakest and least demanded flat product, which could be a cause for concern moving forward since it is the base product. The price gap between HRC and CRC has been opening which should correct itself either by HRC going up or CRC going down within the next several months.
On the import side, while some more offers have been seen recently, they still do not really impose any major threat to the domestic steel makers. Traders have been taking a closer look at some of the offers from foreign sources they haven't seen in a while but they are not too certain if the prices keep going up and therefore have no appetite to buy on speculation.
Regardless, the most common HRC import offers are being seen from Russia and Mexico at around $27.00 cwt. to $28.00 cwt. ($595 /mt to $617 /mt or $540 /nt to $560 /nt). Russian offers are duty-paid, FOB loaded truck in US Gulf ports, while Mexican offers are delivered to the border crossing. Mexico has limited tonnage available though, and may not be as willing as US mills to offer discounts on significant tonnage.
Meanwhile, some CRC offers have been seen out of Brazil on a limited basis at around $34.00 cwt. to $36.00 cwt. ($750 /mt to $794 /mt or $680 /nt to $720 /nt) duty-paid, FOB loaded truck in US Gulf ports. China and India are both on the higher end, with offers mostly at $35.00 cwt. ($772 /mt or $700 /nt) duty-paid, FOB loaded truck in US Gulf ports, or higher. However, some limited Mexican CRC offers may be found for a better rate at around $31.00 cwt. to $32.00 cwt. ($683 /mt to $705 /mt or $620 /nt to $640 /nt) delivered to the border crossing.
Item | US Domestic Spot Price | From Last Week | From Last Month | Pricing Trend | Comments | |
US domestic HRC | $28.00 cwt. ($617 /mt) | down $0.50 cwt. ($11 /mt) | up $4.00 cwt. ($88 /mt) | K | ex-mill Midwest | |
US domestic CRC | $34.00 cwt. ($750 /mt) | up $0.50 cwt. ($11 /mt) | up $4.00 cwt. ($88 /mt) | K | ex-mill Midwest | |