With extended auto plant shutdowns and more US buyers turning to imports, the availability of spot tonnage at US domestic mills is growing.
Recent data has indicated that Japan's disastrous earthquake and tsunami on March 11 may have an extended effect on the US flat-rolled steel industry in the next few months. For example, global automotive manufacturer Toyota Corp. announced in mid-April that it plans on extending its operations cutbacks at its North American plants from April 25 until June 3. The situation is one that major US steel mills executives have been addressing during their quarterly conference calls in the past couple weeks.
US Steel CEO John Surma commented during Tuesday's Q1 conference call, "Some of our automotive customers have reduced April builds and adjusted future production schedules due to parts shortages." Automotive production cutbacks, the general slowdown in US domestic spot purchasing activity recently, along with capacity utilization levels still hovering in the mid-70's has made flat-rolled steel availability plentiful at US mills.
The added spot availability at domestic mills comes at a time when some import offer prices are still dropping-another factor driving down US prices, and a cause for concern for US steelmakers. Last week during their quarterly conference call Nucor CEO Daniel DiMicco explained, "We are keeping a watchful eye on imports as any measurable increase in import levels will be a threat to current market stability, particularly in the sheet markets."
Import hot rolled coil (HRC) offers from Russia have fallen $1.00 cwt. ($22/mt or $20/nt) on the low end since last week to a range of $36.00-$38.00 cwt. ($794-$838/mt or $720-$760/nt) duty-paid FOB loaded truck in US Gulf ports, while Mexican HRC offers dropped $1.00 cwt. to $38.00-$40.00 cwt. ($838-$882/mt or $760-$800/nt) FOB loaded truck in US Gulf ports. Other HRC offers are coming from Turkey. Traders told SteelOrbis that a number of Turkish HRC orders had been booked about two weeks ago at approximately $37.50 cwt. ($827/mt or $750/nt) duty-paid FOB loaded truck in US Gulf ports and have since risen to the current range of $38.00-$39.00 cwt. ($838-$860/mt or $760-$780/nt) duty-paid FOB loaded truck in US Gulf ports.
As for US domestics, both HRC and cold rolled coil (CRC) spot prices are still in previously reported ranges a week ago-$40.00-$42.00 cwt. ($882-$926/mt or $800-$840/nt) ex-Midwest mill for HRC and $46.00-$48.00 cwt. ($1,014-$1,058/mt or $920-$960/nt) ex-Midwest mill for CRC. But the few spot transactions being placed today are negotiable-buyers are finding little resistance in negotiating initial offers from mills, indicating to SteelOrbis, "if you throw in a few extra tons here and there, [mills] will come off at least $0.50 ($11/mt or $10/nt)."
| Cwt. | Metric Ton (mt) | Net ton (nt) | Change from last week | |
| US domestic | ||||
| HRC | $40.00-$42.00 | $882-$926 | $800-$840 | neutral |
| CRC | $46.00-$48.00 | $1,014-$1,058 | $920-$960 | neutral |
| Mexico* | ||||
| HRC | $38.00-$40.00 | $838-$882 | $760-$800 | down $1.00 cwt. |
| CRC | $44.00-$45.00 | $970-$992 | $880-$900 | neutral |
| Russia** | ||||
| HRC | $36.00-$38.00 | $794-$838 | $720-$760 | ↓ $1.00 cwt on low end |
| Turkey** | ||||
| HRC | $38.00-$39.00 | $838-$860 | $760-$780 | newly offered |
| China** | ||||
| CRC | $44.00-$46.00 | $970-$1,014 | $880- $920 | neutral |
**Duty-paid FOB loaded truck in US Gulf ports