Since our last report a week ago, 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 $31.00 cwt. to $32.00 cwt. ($685/mt to $728/mt or $620/nt to $660/nt) ex-Midwest mills. Transaction pricing for CRC had also softened, reflecting a $1.00 cwt. decline from prices reported a week ago. Currently, domestic CRC spot offers are being reported in the approximate range of $36.00 cwt. to $37.00 cwt. ($794/mt to $816/mt or $720/nt to $740/nt), ex-Midwest mills. While it has been heard that some deals, at approximately $1.00 cwt. below the above listed prices for both HRC and CRC may be available, confirmation of bookings at those price points have not been obtained.
Lead times for HRC and CRC have maintained their path of decline, and because of that, both Midwest and West Coast service centers indicate they are maintaining a cautious trend, managing inventory levels tightly, even decreasing them, due to their ability to get shipments relatively quickly from mills; and purchasing managers are holding on to their purse-strings as long as they can with the hope of avoid making a buy one day only to see someone else buy at a lesser price the next.
For now, the challenge of overproduction and under-consumption sustains, with no further announcements by mills indicating plans to curb capacity. Commented one trader, "Oversupply will continue to put pressure on pricing, and until we see lower production numbers this thing will continue to come off."
That having been said, the trend for both HRC and CRC will remain slightly down until supply and demand models begin to move toward congruence.
South of the border, HRC offerings into the US from Mexico have remained neutral for the third consecutive week, 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. Comparatively, Russian HRC is also being offered in the same price range reported last week, 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.
Russian CRC also has sustained availability, and continues to be offered in the approximate range of $37.00 cwt. to $39.00 cwt. ($816/mt to $860/mt or $740/nt to $760/nt), FOB loaded truck US Gulf. Looking to China, they too have trended sideways in their transaction price offerings for CRC, and are still 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.
But again, with the continued volatility seen within US domestic transaction pricing, interest in overseas imports will remain scant until domestic spot pricing begins to stabilize.