Tight inventory, raw materials still keeping US flat rolled trend afloat

Spot market prices for US hot rolled coil (HRC) and cold rolled coil (CRC) have remained stable from last week, but are expected to move on a slight upward trend in the coming weeks.

US domestic spot prices for HRC are still offered in the range of approximately $29.50 cwt. to $30.50 cwt. ($650/mt to $672/mt or $590/nt to $610/nt) ex-Midwest mills. Meanwhile, domestic CRC spot prices remain in the range of $35.00 cwt. to $36.00 cwt. ($772/mt to $794/mt or $700/nt to $720/nt) ex-Midwest mills.

US flat rolled mills’ order books for March are about full, and with US busheling scrap prices up $10/long ton this month so far, mills are expected to push for one more price hike for April delivery to keep the momentum going.

The overall domestic price trend is still slightly up, mostly due to the lack of inventory in the market; customers are generally still keeping inventory very tight. Demand is still sluggish, but with few import options available, domestic mills should be able to keep a positive price momentum going unless raw material and/or import prices start to trend down. However, neither of these outcomes are out of the question as the momentum of both scrap and offshore flat rolled seems to be slowing.

Currently, import booking activity remains quiet, and there are few competitive offers for the US. However, the up-trend offshore import numbers seems to be leveling as China has started to lower their offers for CRC and light gauge HDG. While their offers are still not competitive with US domestic, their move may be a precursor to an overall cooling off of the import flat rolled market, which would ultimately affect the US domestic price trend as well .

Mexican offers for HRC have remained neutral from last week, hovering in the $29.00 cwt. to $30.00 cwt. range ($639/mt to $661/mt or $580/nt to $600/nt) delivered to US border states. However, Mexico is more focused on value-added products, and does not have many offers for standard HRC.

Meanwhile, Russian HRC offers have moved up approximately $1.00 cwt. ($22/mt or $20/nt) from last week to a range of $29.00 cwt. to $30.00 cwt. ($639/mt to $661/mt or $580/nt to $600/nt) duty-paid, FOB loaded truck in US Gulf ports; however, there are rumored offers of $28.00 cwt. ($617/mt or $560/nt).

As for import CRC, Brazil is still offering at about $34.00 cwt. and higher ($750/mt or $680/nt) duty-paid, FOB loaded truck in US Gulf ports. As mentioned, Chinese mills have lowered their prices in the last couple weeks, though they are still not competitive compared to domestic and are edging down from a very high level of approximately $37.00 cwt. duty-paid, FOB loaded truck in US Gulf ports.