US domestic flats prices begin to soften

The few transactions that have been taking place since the Labor Day holiday are reflecting a decidedly downward pointing price trend for the US domestic flat rolled market. Spot prices had been buoyed the last couple weeks by uncertainty regarding supply following negotiations at US Steel and ArcelorMittal. But with US Steel reaching a settlement with the USW union and few now expecting a strike at ArcelorMittal, buyers are pushing for lower prices. "The market has shifted from a seller's market to a buyer's market almost overnight," commented one buyer. Further, with scrap prices coming down $10-$20/lt in September, spot prices are expected to erode relatively quickly. Already, hot rolled coil (HRC) spots are down $0.50 cwt. ($11/mt or $10/nt) since last week to $32.00-$33.00 cwt. ($705-$728/mt or $640-$660/nt) ex-Midwest mill.

Domestic spot prices for cold rolled coil (CRC) are still within the range of $37.00-$38.00 cwt. ($816-$838/mt or $740-$760/nt) ex-Midwest mill but activity is now beginning to trend toward the lower end of the range. And with most buyers now holding off purchases in anticipation of falling prices, pressure on the mills to fill order books is expected to rise quickly. As US domestic spot prices fall, offer prices from Mexico are expected to follow suit, but for now, prices remain at previously reported levels. Meanwhile, Chinese cold rolled prices are already down $0.50 cwt. since last week and are now between $34.00-$35.00 cwt. ($750-$772/mt or $680-$700/nt) DDP loaded truck in US Gulf ports with some larger deals taking place slightly lower.

**DDP loaded truck delivered into Houston