US flat rolled prices register another substantial week-on-week drop

Since last week, activity levels in the US domestic flat rolled market have been minimal and spot prices have fallen drastically. Both hot rolled coil (HRC) and cold rolled coil (CRC) spots are down $1.50 cwt. ($33/mt or $30/nt) over the past week to $28.00-$29.00 cwt. ($617-$639/mt or $560-$580/nt) and $33.00-$34.00 cwt. ($728-$750/mt or $660-$680/nt), respectively, both ex-Midwest mill. On the HRC side, larger deals are already taking place at the sub-$28.00 cwt. level and with lead times still at two weeks despite reduced production levels, spot prices will likely continue their descent over the next week. With prices falling rapidly, largely due to an approximately $55-$60/lt drop in scrap prices for October, there are now rumors that a price increase could come sooner rather than later. Sources tell SteelOrbis that mills would be better off waiting until the November scrap trend settles, or at least becomes more certain, before making any announcement, to give the price increase more support--early predictions are pointing to a sideways to up trend for scrap next month.

As for imports, Mexico is closely following the US domestic price trend, dropping its HRC offers $1.00 cwt. ($22/mt or $20/nt) since last week to $28.00-$29.00 cwt. DDP loaded truck delivered into Houston, and has expressed willingness to negotiate for the "right" order. China, meanwhile, is attempting to increase its offer prices to the US on CRC, but trader sources have indicated that with Chinese prices already higher that US domestic spots, convincing a customer to place an order is no easy task. Consequently, while official CFR offer prices are up about $20/mt, sales prices in the US have not matched the increase yet.

**DDP loaded truck delivered into Houston