US flat rolled market - Have we found the bottom yet?

Contrary to the market situation that many had predicted for the beginning of 2007, demand for flat rolled steel remains sluggish and prices are still soft. The US economy in general still lacks strength, and the major facets of the economy that affect the flat rolled market - the automotive industry and the housing industry, and consequently the appliance industry - are all weak. The flat rolled market also still faces inventory woes, as the glut of unsold inventories at US service centers is keeping many service centers from buying. Because of the lack of purchasing activity, mills are still lowering their prices and even the “Big Three” - Nucor, Mittal, and US Steel - are finding it difficult to keep their hot rolled prices above $500 /nt ($25.00 cwt. or $551 /mt). Domestic offers for both hot and cold rolled coils have slipped approximately $1.00 cwt. ($22 /mt or $20 /nt) in the past two weeks, with hot rolled now ranging from $25.00 cwt. to $27.00 cwt. ($551 /mt to $555 /mt or $500 /nt to $540 /nt) FOB mill and most cold rolled offers ranging from $30.50 to $32.50 ($672 /mt to $717 /mt or $610 /nt to $650 /nt) FOB mill. However, large volume buyers can reportedly get deals significantly lower than this range. Optimists are hoping that the market has finally reached the bottom. However, since demand still hasn't picked up, it is quite plausible that prices could still fall another $20 /nt before the market starts to turn around. Therefore, the pricing trend for domestic flat rolled is slightly down. Still, there is an end in sight to the price demise, as most agree that the market will start to recover in two months' time. Domestic flat rolled prices have become much more competitive with import prices, with domestics sometimes priced the same, and sometimes priced only $20 /nt above imports, depending on the mill. Most import hot rolled coil offers still 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. 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. Service centers report that there are very few flat rolled imports coming in at this time, as ordering has been minimal and it is less profitable for exporters to ship to the US at this time due to the soft market conditions in the US and the weak currency. SteelOrbis has learned that many of the low-priced Mexican offers are no longer on the market. There are still a few floating around, but the number of mills offering has decreased. Service centers report that most cold rolled offers on the market are coming primarily from Brazil and Russia for the East and Gulf Coast and Great Lakes, and from Taiwan and China for the West Coast. The pricing trend for imports is neutral, due to the balancing effect of the aforementioned lack of sales activity, and the stronger flat rolled markets in the rest of the world. Flat rolled prices in China have actually started to go up as well as flat rolled from Russia and CIS countries. These are signs that the import pricing trend will recover before the domestic trend.