Consistent with our previous flats analysis last week, domestic spot pricing for HRC continues to be reported in the approximate range of $32.00 cwt. to $34.00 cwt. ($705/mt to $750/mt or $640/nt to $680/nt) ex-Midwest mills, while transaction prices for CRC has remained in the approximate range of $37.00 cwt. to $39.00 cwt. ($816/mt to $860/mt or $740/nt to $780/nt) ex-Midwest mills.
Buyers of US HRC and CRC continue to "sit on their hands and wait", as one trader put it, with cautions speculation that the marketplace may be susceptible to additional transaction pricing downticks. And much to the surprise of no one, a new round of mill pricing announcements have not been released, keeping asking prices (not spot prices) consistent with numbers put to paper mid-April. Uncertainty regarding how low things will go continues to prevail, and buyers are managing inventories as tight as they can prior to making a move.
Comparatively, though, while order placing at the mill level has not been vast, buyers will eventually need to restock, and market activity is expected to pick back up in upcoming weeks as once buyers begin to regain confidence that the "bottom is not going to fall out".
At the same time, however, service centers may benefit from purchasing sooner than later. "Now may actually be the best time to buy," added another trader. "You have to go away from the herd mentality. Buy when no one else is buying and sell when everyone else is buying. That's when you catch the deal and make the profit." Furthering that thought, it's also speculated that with the currently reported scant purchasing levels, that in an influx in order placement could begin to facilitate pricing upticks.
For now, though, the pricing trend for HRC and CRC continues to remain slightly downward, with order activity anticipated to pick up toward the close of the month.
Looking south, Mexico HRC offerings into the US have ticked downward approximately $2.00 cwt. ($44/mt or $40/nt) since our last report a week ago and is now being reported in the approximate range of $31.00 cwt. to $33.00 cwt. ($683/mt to $728/mt or $620/nt to $640/nt) delivered to customers in US border states. Looking overseas, China continues to offer CRC to the US, but offers have softened by approximately $2.00 cwt. ($44/mt or $40/nt) since our last report. Currently, Chinese CRC is being offered to the US in the approximate range of $39.00 cwt. to $41.00 cwt. ($860/mt to $904/mt or $780/nt to $820/nt), FOB loaded truck US Gulf ports.
Data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that the total import tonnage of HRC has increased from 176,724 mt (census data) in April to 206,702 mt (license data) in May. The only significant offshore importers for HRC were Australia, at 48,542 mt; and Korea, at 27,770 mt.
Further, SIMA data also demonstrates that the total import tonnage of CRC also increased, from 65,109 mt (census data) in April to 68,202 mt (license data) in May, with Japan and Korea being the only significant offshore importers, at 7,623 mt and 7,326 mt, respectively.