US domestic flat rolled prices up slightly as HRC remains weak link

Spot prices in the US domestic flat rolled market have firmed modestly in the last couple weeks but whether the market has truly strengthened remains in doubt. While it took a few weeks for mills' price increase announcements to actually translate into higher spot prices, both hot rolled coil (HRC) and cold rolled coil (CRC) spots have risen $1.00 cwt. ($22/mt or $20/nt) on the low end as some of the lowest deals have dissipated. In particular, sources tell SteelOrbis that integrated mills have been stern on new orders being placed at higher prices. Nonetheless, spot prices remain as much as $2.00 cwt. ($44/mt or $20/nt) shy of official asking prices stipulated in increase letters. Even though prices have bounced off the bottom, spot prices are also not in the midst of an actual upward trend, and with scrap prices settling down $10-$15/lt in February, flat rolled spots are most likely to stagnate for at least another week or two.

In addition to an overall buyer reluctance to place orders, the extremely weak domestic pipe and tube market is taking a major toll on demand for HRC. With pipe and tube a major consumer of flat steel, even a small cutback in purchases makes an impact. Consequently, industry sources explained that a number of flats mills are pushing HRC downstream to coated products. Imports, on the other hand, are having little impact on the US domestic flats market, with Mexico the only viable non-domestic option for many. Mexican HRC offers increased $0.50 cwt. ($11/mt or $10/nt) since last week and have had a number of takers.

*DDP loaded truck in US Gulf ports

**DDP loaded truck delivered into Houston