US domestic and import flats prices tumble

This past week has been one of the quietest in terms of order activity in the US flats market for a while, according to SteelOrbis sources, with buyers of US domestic or import material afraid to make a purchase under the expectation that spot prices are likely to fall further in the next week or two. Despite more than adequate buyer inventories and limited purchasing activity, mill production rates remain extremely high--US raw steel production increased 2.1 percent last week with mill utilization rates at 81.1 percent. As a result, overproduction remains so rampant that hot rolled coil (HRC) lead times have shrunk to as little as one week at a few mills, and are an average of two weeks at most others.

Consequently, domestic HRC spot prices have fallen another $0.50 cwt. ($11/mt or $10/nt) since last week and are now between $31.50-$32.50 cwt. ($694-$716/mt or $630-$650/nt) ex-Midwest mill. And even though there is substantially less downward pressure on US cold rolled coil (CRC) spots, because of such significant declines in HRC prices over the last few weeks, CRC prices are now down to $36.00-$37.00 cwt. ($7940-$816/mt or $720-$740/nt) ex-Midwest mill. As expected, import activity is still extremely quiet, although after months of stagnant offer prices, Chinese CRC offers to the US have fallen $0.50 cwt. in the past week, and are expected to drop again in the next week. Mexican HRC and CRC prices in the US have declined by $1.00 cwt. ($22/mt or $20/nt), but Mexico is also likely to lower offers again in the next week or two.

**DDP loaded truck delivered into Houston