The US flat rolled market has been flirting with bottoming out over the past couple of months, as prices continue the trend of stabilizing for a couple weeks and then dropping another couple of dollars the week after that, slowly bringing prices down, step by step. That pattern continued this week as mills have given in to the quiet market and lowered prices again after a couple of weeks of trending sideways.
On the bright side for the US producers, with the step-by-step decreases, they have shut out most import possibilities by remaining competitively priced with offers from the rest of the world.
Overall, most domestic hot rolled coil (HRC) spot prices have decreased by about $1.00 cwt. ($22 /mt or $20 /nt) from our report last week and are now in the range of approximately $23.00 cwt. to $25.00 cwt. ($507 /mt to $551 /mt or $460 /nt to $500 /nt) ex-mill in the Midwest. However, resourceful buyers usually end up purchasing at the bottom of this range by shopping around and presenting attractive bids.
Domestic cold rolled coil (CRC) spot prices have also decreased since last week, this time dropping more sharply than HRC, with offers falling, on the whole, by approximately $2.00 cwt. ($44 /mt or $40 /nt). As a result, most domestic CRC offers can be found in the range of about $27.00 cwt. to $29.00 cwt. ($595 /mt to $639 /mt or $540 /nt to $580 /nt) ex-mill in the Midwest. CRC prices could also be negotiated in most cases depending on order specifics.
On the import side, while many foreign suppliers are still very much interested in shipping to the US, they will be hard-pressed to put together more attractive orders than from domestic US mills, unless they feature niche or specialty products, such as special sizes and grades. Some countries, such as Italy, France and Egypt, are beginning to enter the HRC market offering specialty items that may not be easily found elsewhere. However, most buyers are still too wary of the long lead times to consider imports at this juncture.
Nonetheless, Mexican HRC import price offerings to the US have decreased by about $1.00 cwt. ($22 /mt or $20 /nt) from last week and can now be found at approximately $22.00 cwt. to $24.00 cwt. ($485 /mt to $529 /mt or $440 /nt to $480 /nt) delivered to the US at the border crossing. Although Mexican mills appear to be the most aggressive source offering HRC to the US, negotiating below this level may be difficult at this point.
The majority of CRC import offers from the most common sources, including India, Mexico, Brazil, Argentina and Turkey, are all trending slightly down even though their price ranges remain unchanged from last week. Indian mills' range remains at about $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, although they may be the most willing to negotiate a lower price for quick orders.
Mexico, Brazil, Argentina, and Turkey continue to offer CRC to the US in the range of approximately $27.00 cwt. to $29.00 cwt. ($595 /mt to $639 /mt or $540 /nt to 580 /nt). South American and Turkish offers are duty-paid, FOB loaded truck in US Gulf ports, while Mexican offers are delivered to the US at the border crossing. The South American offers are a little more competitive than the others. Meanwhile, China remains absent from the US import CRC market, which some traders find rather puzzling given the mills' stated lackluster domestic demand.
Licensing data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total imports of HRC tonnage to the US during February amounted to about 130,000 mt, with Canada, South Korea and Mexico being the top three HRC import sources, at 31,048 mt, 28,880 mt and 27,925 mt respectively.
The licensing data also show that total CRC tonnage in February was at about 91,000 mt, with Brazil accounting for more than half of the monthly total, at 45,835 mt.