US domestic flats prices weaken again despite best mill efforts

US domestic flat rolled spot prices have once again slipped, as lead times remain short and customers are wary of stocking inventories. Overall, spot buying activity has been lackluster throughout January and February--sources tell SteelOrbis that when prices bottomed in late fall/early winter 2012, many customers purchased much of their January and even some February requirements. As a result, even though end-use demand has been relatively decent, distributors are still working their way through inventory. And with steel mill capacity utilization rates not slowing down, flat steel availability--particularly hot rolled coil (HRC)--is more than adequate to cover the minimal orders being placed.

Lead times for HRC remain at only two to three weeks, which has been deemed a major reason for spot prices slipping the $1.00 cwt. ($22/mt or $20/nt) they firmed just two weeks ago. HRC spots are now $29.00-$30.00 cwt. ($639-$661/mt or $580-$600/nt) ex-Midwest mill. Cold rolled coil (CRC) spots holding on a little better and are stable since last week at $35.00-$36.00 cwt. ($772-$794/mt or $700-$720/nt) ex-mill, although also have potential to weaken in the next couple weeks. Import offers for HRC, meanwhile, have quieted but US buyers aren't looking to book offshore tons now anyhow. Chinese mills returned from holiday looking to raise offer prices, and CRC prices are likely to be up as much $1.00 cwt. by next week.