Although spot pricing for US domestic cold rolled coil (CRC) has remained neutral since our last report a week ago, transaction pricing for US domestic hot rolled coil (HRC) has ticked down another notch.
Domestic spot pricing for HRC has softened by about $0.50 cwt. ($11/mt or $10/nt) and is now being reported in the approximate range of $31.50 cwt. to $33.50 cwt. ($694/mt to $739/mt or $630/nt to $670/nt) ex-Midwest mills. Furthermore, average domestic HRC lead times have dropped to a staggering two to three weeks. Basically, you can get the product as soon as is possible. Transaction pricing for CRC, though, still continues to be reported 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, although not many offers are still being seen at the higher end of this range. CRC and most coated flat products also have short lead times, but not as drastic as HRC, at about four to five weeks.
With transaction pricing still trending soft and the "summer doldrums" (as one trader put it) now upon us, things continue to move relatively slowly in the US flats markets. While purchases are still being made, inquiries and order levels have dropped from levels seen in early May. "Activity is down and we just don't see a lot happening," commented a northeast service center. "People are buying only what they need and domestically, we're having an incredibly hard time getting people to commit to futures."
For now the trend for HRC and CRC remains slightly down, with the probability of offers being seen below the above-mentioned ranges becoming more prevalent in the upcoming weeks.
Looking south, Mexico HRC offerings into the US have remained neutral since our last report a week ago and continue to be 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, Russia is also offering some HRC into the US, at approximately $31.50 cwt. to $32.50 cwt. ($694/mt to $717/mt or $630/nt to $650/nt, FOB loaded truck US Gulf ports.
Russia continues to try and make some noise with CRC offers as well, ranging from around $37.00 cwt. to $39.00 cwt. ($816/mt to $860/mt or $740/nt to $760/nt) and perhaps even a little lower for the right quantity. Meanwhile, offerings out of China have softened by another $1.00 cwt. ($22/mt or $20/nt) since our last report, with Chinese CRC now being offered to the US in the approximate range of $38.00 cwt. to $39.00 cwt. ($838/mt to $882/mt or $760/nt to $800/nt), FOB loaded truck US Gulf ports.
Nevertheless, domestic product remains too readily available at attractive prices for US buyers to put much consideration into buying from overseas, which are currently showing lead times into September.
Data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that as of June 15, the total import tonnage of HRC for the month of June thus far is 112,972 mt (license data), with the most significant offshore importers being Australia, at 40,371 mt; and Korea, at 28,660 mt.
Further, SIMA data also demonstrates that as of June 15, the total import tonnage of CRC for the month of June thus far is 34,543 mt, with the most significant offshore importer being Japan and Korea, at 6,270 mt and 6,034 mt, respectively.