US domestic flats prices continue their rapid decline

The US domestic flat rolled spot market is rapidly softening and prices are coming apart at a rapid pace. Most buyers are now sitting on the sidelines as they wait for the market to bottom, forcing mills to lower prices in order to fill order books. The dynamic has pushed US domestic hot rolled coil (HRC) spot prices down to $31.00-$32.00 cwt. ($683-$705/mt or $620-$640/nt) ex-Midwest mill, a $1.00 cwt. ($22/mt or $20/nt) drop since last week when prices fell $0.50 cwt. ($11/mt or $10/nt). Cold rolled coil (CRC) spots, meanwhile, have also slipped by $1.00 cwt. and now range from $36.00-$37.00 cwt. ($794-$816/mt or $720-$740/nt) ex-Midwest mill. But the current spot ranges are far from firm, and any buyer placing a large volume order can negotiate prices lower.

In the next couple weeks, spot market prices are expected to continue their descent, and so purchasing activity is likely to remain lethargic. SteelOrbis sources pointed out that demand levels remain steady, but with lead times on HRC averaging about two weeks and plenty of already-produced material sitting on the ground at mills, there's little incentive to stock inventories. Less expensive imports are also a factor dragging down US domestic flats prices. The spread between Chinese CRC prices and US domestic CRC spot prices had gotten too wide and Chinese offers are likely to decline again in the next couple weeks. Meanwhile, Mexico has lowered its CRC prices for the US by $1.00 cwt. since last week to the range of $34.00-$35.00 cwt. ($750-$772/mt or $680-$700/nt) DDP loaded truck delivered into Houston, low enough for some US buyers situated near the Gulf to look south of the border to fulfill some of their needs.

**DDP loaded truck delivered into Houston