US flat rolled momentum shows few signs of slowing

US domestic flat rolled spot prices have reached official mill asking prices, as lead times continue to extend and demand remains stable. In the last week, mills have been firm in their push for higher prices, boosted by hot rolled coil (HRC) lead times that are well into August and cold rolled coil (CRC) lead times that have moved into September from some mills. Sources tell SteelOrbis that if a buyer needs July HRC delivery, it's attainable, but at a premium. HRC spot prices are not up to $31.50-$32.50 cwt. ($694-$716/mt or $630-$650/nt) ex-Midwest mill, with the majority of activity taking place on the higher end of the range. The strength of HRC has narrowed the usual $5.00 cwt. ($110/mt or $100/nt) gap between HRC and CRC by $0.50 cwt. ($11/mt or $10/nt) as well.

Demand has generally remained unchanged over the past couple months, with the exception of HRC demand from tube and pipe producers, which has seen a noticeable bump in recent weeks--the AD/CVD filing against OCTG imports is also anticipated to bode well for US domestic pipe producers, and therefore flat steel demand. Although many are still skeptical that the current uptrend will continue for the long term, short-term prospects for flat steel spot prices are positive, and a fourth round of price increases are now imminently anticipated. The stronger domestic market appears to have also lent itself to increased import offers, and trader sources note that Russia has reentered the market and started to offer HRC futures. So far, however, interest is limited.

*DDP loaded truck in US Gulf ports

**DDP loaded truck delivered into Houston