US flat rolled market - Close to bottoming out

The US domestic flat rolled market remains very soft, with prices dropping $2 - $3 cwt. ($44 / mt to $66 / mt or $40 /nt to $60 /nt) in the past month. Domestic hot rolled coil prices now range from $26.00 cwt. to $28.00 cwt. ($573 /mt to $617 /mt or $520 /nt to $560 /nt) FOB mill, a $2.00 cwt. to $3.00 cwt. drop in the past month. Cold rolled coil prices now range from approximately $31.50 cwt. to $33.50 cwt. ($694 /mt to $739 /mt or $630 /nt to $670 /nt) FOB mill, down $2.00 cwt. in the past month. Discounting for large tonnage buyers is also becoming more prevalent across the board, though some mills are discounting more than others. The “top three” domestic producers are still trying to hang on to prices at the higher end of the spectrum, while second-tier mills are offering more competitively in order to move tonnage. The pricing trend is still down, with high service center inventories being the main culprit. The weak automotive market is another reason for the depressed market, with mills like AK Steel, which supplies mostly to the automotive sector, taking the hardest hit. Compared to the hot and cold rolled markets, the galvanized market is still relatively stable, as it continues to benefit from high zinc prices. Domestic galvanized coil prices currently range from $34.00 cwt. to $36.00 cwt. ($750 /mt to $794 /mt or $680 /nt to $720 /nt) ex-mill. West coast pricing remains several dollars cwt. higher than pricing in the rest of the US, with west coast producer California Steel Industries benefiting from its position as the only producer in the market. In general, the US domestic flat rolled market is still in bad shape, but prices are close to bottoming out. Domestic mills are not likely to lower prices much further since this would do little to spur more buying activity as inventories are still full. However, eventually these inventories will be depleted and service centers will have to start buying again. Mills have been cutting back production since October, which will help to balance the supply and demand equation. Experts predict the market will start to come around again in February or March of next year. Import flat rolled pricing has also declined in the past few weeks, though not by as much as domestic pricing. Import hot rolled coils now range from $25.00 cwt. to $27.00 cwt. ($551 /mt to $595 /mt or $500 /nt to $540 /nt) FOB loaded truck, in US Gulf ports, down $1.00 cwt. to $2.00 cwt. in the past month. Cold rolled coil imports range from $29.00 cwt. to $31.00 cwt. ($639 /mt to $683 /mt or $580 /nt to $620 /nt) FOB loaded-truck in US Gulf and West Coast ports, down approximately $0.50 cwt. in the past month. Import bookings are very slow, as import pricing is too close to domestic pricing to be competitive now that bargain offers from Mexico have exited the market. Some cold rolled and galvanized offers are still coming from China and Thailand, but hot rolled imports are now scarcer. Experts say that import pricing is also close to bottoming out, and that buying activity should pick up again in January/February for April/May arrivals.