Flat rolled spot prices continue to rise this week as a number of mills have begun unofficially asking for the higher prices first announced by AK Steel in early February.
While no official announcements have been issued in the US domestic flats market, producers that had only raised prices $30/nt in February (after AK Steel increased prices $50/nt) began informing customers this week that benchmark prices on hot rolled coil (HRC) and cold rolled coil (CRC) are up another $20/nt and are now $45.00 cwt. ($992/mt or $900/nt) and $50.00 cwt. ($1,102/mt or $1,000/nt), respectively, ex-mill, strengthening the flats market's ability to collect higher spot prices now that there is no disparity in official prices between mills.
The HRC range this week is wider than usual as last minute orders are still being placed at the lower end of the $42.00-$45.00 cwt. ($926-$992/mt or $840-$900/nt) ex-Midwest mill range. This week's spot ranges are up $0.50 cwt. ($11/mt or $10/nt) on the low end, but have increased $1.50 cwt. ($33/mt or $30/nt) on the high end as order activity remains steady with lead times around five to six weeks.
CRC continues to be the strongest product in the domestic flats market with demand outweighing supply in some cases (lead times are in the six to seven week range), and order books for May are expected to open over the next few weeks. Spot ranges are now $48.00-$50.00 cwt. ($1,058-$1,102/mt or $960-$1,000/nt) ex-Midwest mill-a $1.00 cwt. ($22/mt or $20/nt) increase over previously reported ranges a week ago.
With flat-rolled lead times now one to two months and prices moving up, the flats market looked to be slated for a lively end to Q1 and strong Q2; however, higher flat-rolled prices could be curbed when steelmaking operations are ramped up in mid-May by the three (Wheeling, Warren and Sparrows Point) former Severstal North America-owned plants (now owned by Renco). The added capacity from those operations combined with capacity that has already come online by ThyssenKrupp's Alabama plant could cause flats market prices to topple quickly in late spring/early summer. "The main concern is that they (Renco and Thyssenkrupp mills) will be more concerned with market share than maintaining current market prices," commented one trader in the South.
The fear of prices falling quickly is only continuing to dampen import activity. Because of extended lead times, new Korean HRC offers in the $41.00-$42.00 cwt. ($904-$926/mt or $820-$840/nt) duty-paid FOB loaded truck in US Gulf ports range are rousing little interest with the exception of a few smaller orders being placed on the West Coast.
On the other hand, the short lead times at Mexican mills and sales prices up to $5.00 cwt. ($110/mt or $100/nt) below US prices remain a viable option for US buyers looking to escape rising prices in their domestic markets. Mexican offers are still $41.00-$42.00 cwt. FOB loaded truck delivered into Houston ports with a number deals being reported as low as $40.00 cwt. ($882/mt or $800/nt).
| Cwt. | Metric Ton (mt) | Net ton (nt) | Change from last week | |
| US domestic | ||||
| HRC | $42.00-$45.00 | $926-$992 | $840-$900 | ↑ $1.50 cwt. on high end |
| CRC | $48.00-$50.00 | $1,058-$1,102 | $960-$1,000 | ↑ $1.00 cwt. |
| Mexican* | ||||
| HRC | $41.00-$42.00 | $904-$926 | $820-$840 | neutral |
| Korean** | ||||
| HRC | $41.00-$42.00 | $904-$926 | $820-$840 | newly offered |
| Chinese** | ||||
| CRC | $45.00-$47.00 | $992-$1,036 | $900- $940 | neutral |
**Duty-paid FOB loaded-truck in US Gulf ports