US flat rolled market begins to slowly unravel

After stalling a week ago, US domestic flat rolled spot prices have begun to slip as price-cutting is once again becoming the norm in the market. Less than half of the late February-announced $2.50 cwt. ($55/mt or $50/nt) price increase that put US domestic hot rolled coil (HRC) asking prices at about $32.00-$32.50 cwt. ($705-$716/mt or $640-$650/nt) ex-Midwest mill was actually absorbed into the spot market. HRC spot prices firmed by about $1.00 cwt. ($22/mt or $20/nt) about two weeks ago into the range of $30.00-$31.00 cwt. ($661-$683/mt or $600-$620/nt) ex-Midwest mill but have now drifted toward the lower end of the range with rumblings that a large order could garner a higher number. Sources tell SteelOrbis that the CRU continues to hinder mills' ability to raise prices in the spot market as customers have been able to secure tonnage against CRU prices rather than paying higher asking prices from the mills.

With scrap prices next month likely to move sideways to slightly down, mills will not have "rising raw material costs" to fall back on as a justification for higher flat rolled prices, which could result in a continued downward price trend. Demand is decent, according to service center sources, so a precipitous fall in prices isn't likely either. The lack of any momentum in the domestic market is keeping a lid on import activity--HRC import offers are sporadic, but are too high to have any impact. Cold rolled coil (CRC) offer prices out of China have fallen by $10/mt since last week, but that decrease has not made its way into sales prices in the US yet.