US flat rolled market - Market heats up for spring shipments

Although the amount of flat rolled imports coming into the US is as high as ever, domestic prices continue to rise on the back of strong demand. Domestic offers for hot rolled coils now range from $28.00 cwt. to $29.00 cwt. ($617 /mt to $639 /mt or $560 /nt to $580 /nt), and cold rolled offers now range from $33.00 cwt. to $34.00 cwt. ($728 /mt to $750 /mt or $660 /nt to $680 /nt). Galvanized prices have risen by $2.00 cwt. ($44 /mt or $40 /nt) in the past couple of weeks, now ranging from $35.50 cwt. to $37.50 cwt. ($782 /mt to $827 /mt or $710 /nt to $750 /nt). Mills are still evaluating zinc extras for galvanized products, and another price increase will hit the market in April. By June, West Coast galvanized offers are expected to be up $60 /nt ($66 /mt or $3.00 cwt.) from current prices. Cold rolled prices on the West Coast are also expected to rise by June, by roughly $20 /nt ($22 /mt or $1.00 cwt.). Prices for stainless products, which improved approximately 3 percent in March, are expected to rise moderately in the coming months. Despite relatively stable scrap prices and decreased natural gas costs, flat rolled prices are still on the rise because of strong demand. Galvanized sheet prices are also affected significantly because of the high zinc cost. Also, domestic mills are now taking a more disciplined approach to production in order to prevent an over-supply situation. The AK Middletown situation has not yet had much of an impact on supply, but it could have a slight impact if the worker lockout continues for much longer. The company has replaced its contract workers with replacement workers, but not all of the workers have been replaced and output will most likely be decreased until the lockout ends. Flat rolled imports have not slowed, with Latin American exporters back on the market after production problems last month were resolved. The import markets are strengthening, however, it will eventually impact domestic prices positively. The Chinese market, which exports cold rolled and galvanized products, is particularly strong right now, so we should not see too many bargain offers from them. Preliminary census data from the US import monitor shows that total steel imports to the US in February 2006 were 3'201'642 mt, the highest they've been in the past year. Total hot rolled sheet imports in February were 322'894 mt, with the largest tonnage (58'532 mt) coming from Korea. Total cold rolled sheet imports were 251'044 mt, with Brazil as the largest exporter at 69'047 mt.