The US flat rolled market has been trending upward since domestic mills announced a widespread $30 /nt ($1.50 cwt. or $33 /mt) price increase earlier this month and a second round of increases announced in the last couple weeks has pushed spot prices even further upwards. But while buyers are happy to see the market bottoming, some are also concerned these increases are too fast and too steep to sustain.
Over the past week, US hot rolled coil (HRC) spot offers have increased by about $0.50 cwt. ($11 /mt or $10 /nt) and can now be found for around $21.00 cwt. ($474 /mt or $430 /nt) to $23.00 cwt. ($507 /mt or $460 /nt) ex-mill in the Midwest and for around $25.00 cwt. ($551 /mt or $500 /nt) on the West Coast. While most HRC spot offers are approaching ArcelorMittal's announced $23.00 cwt. base, many buyers are looking for mills that will compromise on the newly announced prices. Despite increasing prices, customers understand that the real demand is still very low and after this flurry of activity dies down, domestic mills may come back hungry again.
Meanwhile, US cold rolled coil (CRC) spot prices have increased by approximately $1.00 cwt. ($22 /mt or $20 /nt) since last week, with most CRC spot offers ranging from $26.00 cwt. ($573 /mt or $520 /nt) ex-mill, all the way up to ArcelorMittal's CRC base of $28.00 cwt. ($617 /mt or $560 /nt) ex-mill in the Midwest. Of course, most buyers are pushing for the $26.00 cwt. ($573 /mt or $520 /nt) offer. West Coast mills are trying to push CRC offers up to almost $30.00 cwt. ($661 /mt or $600 /nt), but the spot market is not quite there yet.
While it is becoming apparent that the flat rolled market is "still shaking out," following the August price hike announcements, July books are already full and lead times have extended into the second and third weeks of August, with reports of some mills already accepting for September. The consensus from local distributors seems to be that domestic mills will eventually achieve their second price increase as the trend slowly climbs up; however, while mills would love to announce another increase for September prices, it is not certain yet whether demand is strong enough to allow for further increases.
On the import side, the market has become eerily quiet. Traders have reported to SteelOrbis that there have been virtually zero HRC import offers to the US. Mexican mills are full through August and are no longer accepting offers, while Venezuela has just faded away for the time being.
Some CRC import offers to the US have been seen recently, but nothing has been booked because the prices remain too high and vessel availability remains low. Furthermore, foreign sources are expected to continue raising their offers as their domestic markets improve. For now, Chinese CRC offers continue to range from approximately $28.00 cwt. to $30.00 cwt. ($617 /mt to $661 /mt or $560 /nt to $600 /nt) duty-paid, FOB loaded truck in US Gulf ports. Brazilian offers can still be found for around $26.00 cwt. to $28.00 cwt. ($573 /mt to $617 /mt or $520 /nt to $560 /nt) duty-paid, FOB loaded truck in US Gulf ports; and Korean offers are at about $33.00 cwt. to $35.00 cwt. ($728 /mt to $772 /mt or $660 /nt to $700 /nt) duty-paid, FOB loaded truck in West Coast ports.