US flat rolled steel prices have leveled since our last report a week ago, and now some SteelOrbis sources think prices have finally reached their ceiling. "Prices have gone up consistently since August of last year," a source said. "This is the first time since August that we've finally seen some stability."
As with last week, domestic HRC prices are trending in the range of $54-$60 cwt. ($1,191-$1,323/mt or $1,080-$1,200/nt), FOB mill, whereas US CRC spot market prices have remained in the range of $65-$70 cwt. ($1,433-$1,543/mt or $1,300-$1,400/nt), FOB mill.
“We think the market is pretty much peaking, another source said. “HRC futures are down significantly, which gives some indication of forward market expectations. We also hear that scrap will go down next month.”
A third source said that he’s not entirely sure that prices won’t tick up more. “For the short term, if you look at lead times and the fact that the mills have been late delivering a lot of their spot orders, it doesn’t seem like there’s anything stopping the mills from taking prices up more. It’s about supply and demand. Unfortunately, prices at this level are unhealthy for everyone, and when things start to fall, if a service center is stuck holding a lot of high priced inventory and prices fall off a cliff, well this is the type of thing that can put someone out of business.”