US domestic flats prices rise but remain short of announced increases

Spot prices in the US domestic flat-rolled market have increased over the last week, but are still well below official mill asking prices.

Following a second round of increases for $2.00 cwt. ($44/mt or $40/nt) from most major US domestic flat-rolled mills last week, domestic spot prices have firmed into the range of $33.00-$34.00 cwt. ($728-$750/mt or $660-$680/nt) ex-Midwest mill for hot rolled coil (HRC) and $39.00-$40.00 cwt. ($860-$882/mt or $780-$800/nt) ex-Midwest for cold rolled coil (CRC)--both up $1.00 cwt. ($22/mt or $20/nt) on the low end. Nonetheless, both HRC and CRC spot prices remain below official mill asking prices which are about $3.00 ($66/mt or $60/nt) higher.

Although order activity remains steady, sources tell SteelOrbis that the $5.00 cwt. ($110/mt or $100/nt) in announced increases over the last month (which includes the initial $3.00 cwt. increase in early August) is more of a price push from mills rather than a demand pull from buyers. "What we buy and the way we buy hasn't changed in the last few weeks," explained one Southeast distributor, "the only difference is mills are now insisting on higher prices." Buyers, particularly service center buyers, are trying to keep their inventories as lean as possible, and maintain that there is little confidence that the price boost over the past couple weeks will sustain through the usually slower late fall/early winter months.

One thing US domestic mills don't have to worry about affecting efforts to collect higher prices is competition from imports. Chinese CRC offer prices have not moved in the last three weeks after increasing $1.00 cwt. in mid-August, and while Mexican HRC offers are still available they remain higher than US domestic spot prices, and are therefore of little interest to US buyers.

Not only is current import activity slow, but limited import bookings over the last few months has resulted in a significant drop-off in arriving flat-rolled imports to the US in August. US Steel Import Monitoring and Analysis (SIMA) data show 167,804 mt (license data) of import hot rolled sheet arriving to the US in August compared to 293,509 mt (census) data arriving in July. Arriving imports of cold rolled sheet also fell from July to August, although less substantially. Data show 81,948 mt of imported cold rolled sheet arriving in the US in August compared to 102,418 mt in July.

**DDP loaded truck in US Gulf ports