Import offers gaining some traction as US flats spots stagnate

The number of import offers in the US has been growing more prevalent in the last couple weeks, and while most customers are still unwilling to commit to futures, overall import activity has seen a mild pick up. Russian offers of hot rolled coil (HRC) have been especially interesting in recent weeks. Depending on the results of International Trade Administration's (ITA's) decision on October 1 regarding the US' suspension agreement with Russia, the HRC orders may simply be cancelled before they are even shipped. So, while the price of $30.00-$31.00 cwt. ($661-$683/mt or $600-$620/nt) DDP loaded truck in US Gulf ports, unchanged since last week, is relatively attractive, it isn't enough to convince most US buyers to take the risk. Expectedly, those looking to place orders for a few tons offshore are considering other options, such as Brazil, which is now actively offering hot rolled coil (HRC) and cold rolled coil (CRC) to the US at prices as much as $2.00 cwt. ($44/mt or $40/nt) below US domestic.

As for the US domestic market, after a steady flow of order activity throughout August, the price uptrend has stalled for now and HRC spots are unchanged over the past couple weeks in the range of $32.50-$33.50 cwt. ($716-$739/mt or $650-$670/nt) ex-Midwest mill. The possibility of a strike at two of the US' largest producers of flat rolled--ArcelorMittal USA and US Steel--if an agreement isn't reached with the USW union by September 1 had convinced wary buyers to place orders in order to hedge against a possible shortage (or price spike) should there be a strike. Sources have told SteelOrbis that negotiations have been brutal and the mills and union are still far apart on the issues. However, should a new labor contract be signed prior to the fast-approaching deadline, industry insiders predict that domestic spot prices could begin to fall again and therefore few buyers are willing to stock inventories.

**DDP loaded truck delivered into Houston