US flat rolled prices begin upward climb

With an announced $2.50 cwt. ($55/mt or $50/nt) price increase from mills and a scrap price surge this month, the US domestic flat rolled pricing trend is turning around. While skepticism immediately following the flat rolled price increase was widespread, a significant scrap price increase in March is already helping to boost hot rolled coil (HRC) spot prices. Mills' official HRC asking prices are $32.50 cwt. ($716/mt or $650/nt) ex-Midwest mill, although spot prices remain well below at $30.00-$31.00 cwt. ($661-$683/mt or $600-$620/nt) ex-mill--up $1.00 cwt. ($22/mt or $20/nt) since last week. Cold rolled coil (CRC) spot prices are stagnant from last week but are likely to firm along with HRC. Sources tell SteelOrbis that new prices are still being negotiated "by mill, order and customer," but the sub-$30.00 cwt. HRC deals are now largely unattainable, and spots are likely to increase further in the next week or two.

Customer demand levels have not improved in the last week, and so buying activity continues to lag and lead times remain at around two to three weeks on HRC and four to six weeks for CRC. The driving force behind firmer flats prices is a $40/lt busheling scrap price increase in the Midwest, which has given flat rolled mills the leverage they need to push for their announced increase. Sources already anticipate a second price announcement to build upon the recent upward momentum. Even as domestic prices are anticipated to increase in the coming weeks, the lack of confidence in the market's long term trend will discourage most buyers from booking offshore material. Traders note that there are no workable offers for HRC available anyhow and Chinese CRC offers are only attracting mild interest on the West Coast.