US domestic flat rolled prices take another dive

The announced idling of RG Steel a couple weeks ago appears to have had little to no effect on the US flat rolled spot market, and prices have continued to slide again this week. SteelOrbis sources indicate that mills won't be any more willing to negotiate prices as a result of a substantial $60-$70/lt drop in busheling scrap this month, either, since flat rolled spots fell about that much, if not more, prior to this month's decrease. However, because lead times remain at about two weeks on hot rolled coil (HRC) at many mills and buyers are still focused on reducing inventory rather than building it, mill order books are lethargic and spot prices are falling. HRC spot prices have dropped $1.00 cwt. ($22/mt or $20/nt) in the last week, but buyers with more negotiating power are already able to book orders at under the general $30.00-$31.00 cwt. ($661-$683/mt or $600-$620/nt) ex-mill range. Cold rolled coil (CRC) overcapacity is less pronounced, but because of the weakness in HRC, spot prices are also rapidly slipping.

Some industry insiders believe that with current spot prices cutting into any measurable profitability for mills, a price increase may soon loom on the horizon. But at least for the next couple weeks, prices are expected to continue their decline. It's no surprise then that import activity is quiet, and offer prices from offshore aren't attractive enough for most in the Gulf and Midwest regions to take the risk. However, Chinese CRC offers at approximately $36.00 cwt. ($794/mt or $720/nt) DDP loaded truck delivered into the West Coast are gaining traction on the West Coast, where domestic spots from local mills are currently $38.00 cwt. ($838/mt or $760/nt) ex-mill.

*DDP loaded truck delivered into Houston