US domestic flats prices inch higher amid minimal buying

While US domestic flat rolled mills are certainly pushing for the full announced increases on spot transactions, many buyers remain on the sidelines. Lead times have stretched out slightly over the past couple weeks, but with delivery dates still in late December at many mills, buyers are holding off purchases so as not to stock inventories before the close of 2012. This week has been a slow week in terms of buying activity, and with the Thanksgiving holiday days away, that scenario isn't likely to improve in the next week. Hot rolled coil (HRC) spot prices are approximately $30.00-$32.00 cwt. ($661-$705/mt or $600-$640/nt) ex-Midwest mill, up $1.00 cwt. ($22/mt or $20/nt) on the high end over the past week. But despite the increase, spots remain short of asking prices, which range from $32.50-$33.50 cwt. ($716-$739/mt or $650-$670/nt) ex-mill.

After Thanksgiving, and once mill lead times move firmly into January, mills could announce another price increase in order to keep the recent upward pricing momentum--although slow--going, according to service center sources. Given that the two domestic price increases announced over the past month are only slowly being absorbed, many US buyers aren't confident enough in the market to make any major import buys. Further, import sources are also pushing for an increase following higher US prices. China raised its prices by about $0.50 cwt. ($11/mt or $10/nt) in the past week on cold rolled coil (CRC), but traders are skeptical regarding how many orders will actually be booked at the higher prices.