Market players throughout the US have speculated that flat rolled steel pricing would begin to shift downward in mid-to-late September, with prices not bottoming until Q4.
Earlier this week, SteelOrbis reported that cracks had begun to emerge in the US HDG market. It would seem that CRC prices have not been immune to similar downward pressure, as today’s US domestic CRC prices are down by $1.00 cwt. ($22/mt or $22/nt), week-over-week, and are now being heard in the range of $35-$37 cwt. ($772-$816/mt or $700-$740/nt) ex-mill.
Market sources believe that mill inventory levels continue to be healthy. Current demand is described as soft, and “not nearly enough to keep up with the amount of steel that’s available in the market.”
Buyers believe that the only reason prices firmed after flats mills announced three back-to-back price increases was because lead times were short, and thin inventory levels were being maintained. Once buyers believed prices would begin to trend upward, a flurry of restocking took place. Now that buyers have their steel, the pendulum is once again swinging in the other direction.
This sentiment, coupled with a forecast dip in US scrap prices during the October buy cycle, has many buyers reluctant to make volume buys out of concerns the market will remain soft through the end of the year.