US flat rolled market dominated by softening demand, falling prices

US domestic flat rolled prices are still on a decline, as the lower end of the price range offered is slipping further and further away from where it was a few weeks ago. 

Domestic prices for both hot rolled coil (HRC) and cold rolled coil (CRC) have slipped about another $1.00 cwt. ($22 /mt or $20 /nt) since our report last week. 

Most domestic HRC spot prices are in the range of $44.00 cwt. to $48.00 cwt. ($970 /mt to $1,058 /mt or $880 /nt to $960 /nt) ex-mill Midwest, although rumors are circulating that certain buyers are finding HRC for as low as $40.00 cwt. ($882 /mt or $800 /nt). A number this low has not been confirmed; however one large buyer told SteelOrbis, “I know of deals taking place at $43.00 cwt. right now, and I wouldn’t doubt if someone is finding it for $40.00 cwt.” 

The usual $4.00 cwt. to $5.00 cwt. ($88 /mt to $110 /mt or $80 /nt to $100 /nt) gap between HRC and CRC is still apparent, with most CRC offers ranging from $48.00 cwt. to $52.00 cwt. ($1,058 /mt to $1,146 /mt or $960 /nt to $1,040 /nt), although again, like with HRC, buyers are saying deals can be made for lower numbers. The domestic CRC market is also still seeing more contract tons enter the market, giving buyers a cheaper alternative than buying straight from the mill. Those contract CRC tons are said to be selling for less than $48.00 cwt. ($1,058 /mt or $960 /nt). 

In general, demand for all flat rolled products is dismal. Stories of production cuts at the mills are circulating, and a large part of the reason that domestic mills are ready and willing to strike deals with customers is just to stir up some needed business. The automotive market has tanked and residential construction remains soft. Now, paired with the country’s ongoing financial crisis, market insiders wonder when it will all come to an end. Coil prices are still trending down, and while there is still some buying activity from distributors and end-users, buyers are hunting for, and usually able to achieve, the best deal, shortest lead times, and quickest delivery. The “buyers’ market” mentality remains.  

For those buyers who are interested in purchasing some reasonably-priced flat rolled products, Mexico has been offering at numbers a few dollars shy of the domestic price. At the border crossing, Mexico is offering HRC to the US in the range of $42.00 cwt. to $45.00 cwt. ($926 /mt to $992 /mt or $840 /nt to $900 /nt), while CRC is ranging from $45.00 cwt. to $47.00 cwt. ($992 /mt to $1,036 /mt or $900 /nt to $940 /nt). 

Buyers have also mentioned a European HRC source with offers in the range of $45.00 cwt. to $47.00 cwt. ($992 /mt to $1,036 /mt or $900 /nt to $940 /nt) FOB loaded truck Gulf Coast ports. 

On the CRC side, the usual Chinese offers are still afloat, though they are about $3.00 cwt. ($66 /mt or $60 /nt) lower than last week. Chinese CRC offerings are now in the range of $49.00 cwt. to $51.00 cwt. ($1,080 /mt to $1,124 /mt or $980 /nt to $1,020 /nt) FOB loaded truck US West Coast ports. 

Offers from India are a few dollars higher than their Chinese counterparts, though both sources’ prices are trending down. Indian offers for CRC continue to range from $52.00 cwt. to $54.00 cwt. ($1,146 /mt to $1,191 /mt or $1,040 /nt to $1,080 /nt) duty-paid, FOB loaded truck, in US Gulf ports.