US domestic flats prices have dropped substantially in the last week as mills' desperation for orders has resulted in deals being made near, or in some cases below mill production costs. Domestic HRC spot prices are down $2.00 cwt. ($44/mt or $40/nt) since last week to $29.00-$31.00 cwt. ($639-$683/mt or $580-$620/nt) ex-Midwest mill and cold rolled coil (CRC) spot prices are now between $35.00-$37.00 cwt. ($772-$816/mt or $700-$740/nt) ex-Midwest mill, a $2.00 cwt. decline on the low end. Even though SteelOrbis has learned of a number of orders being placed at the lower end of the ranges, they have been for significant tonnages, and most standard size HRC orders are being placed closer to $30.00-$31.00 cwt. ($661-$683/mt or $600-$620/nt) ex-Midwest mill.
While continued high levels of domestic production and a slowdown in demand continue to be the driving forces behind weakening flats prices, well-stocked inventories are playing a part as well. Industry insiders tell SteelOrbis that many distributors hedge-bought in late August/early September after mill-announced increases in order to secure lower-priced material before prices increased. As a result, most went into October with heavy inventories, and have thus been buying little to no steel in the last couple weeks. In some cases, buyers are even liquidating inventories. As such, mill order books are extremely weak and deals continue to be made at prices significantly lower than prices just one week ago.
Import flat rolled offers to the US have become essentially obsolete, and Turkish and Russian hot rolled offers to the US are as much as $5.00 cwt. ($110/mt or $100/nt) above US domestic spot prices and are therefore being almost entirely ignored by US buyers. Chinese CRC offers in the range of $40.00-$41.00 cwt. ($882-$904/mt or $800-$820/nt) DDP loaded truck in US Gulf ports, unchanged from last week, are also uncompetitive at the moment, but are likely to drop in the next couple weeks as a result of a dramatically softening Chinese domestic flats market.
| Cwt. | Metric Ton (mt) | Net ton (nt) | Change from last week | |
| US domestic | ||||
| HRC | $29.00-$31.00 | $639-$683 | $580-$620 | ↓$2.00 cwt. |
| CRC | $35.00-$37.00 | $772-$816 | $700-$740 | ↓$2.00 cwt. on low end |
| China* | ||||
| CRC | $40.00-$41.00 | $882-$904 | $800-$820 | - |