While most US hot rolled coil (
HRC) offers from domestic mills have not declined further since last week, some buyers still report that they can get
HRC for under $20.00 cwt. from certain minimills if they present them with a large order.
Generally, most domestic
HRC offers continue to range from $20.00 cwt. to $22.00 cwt. ($441 /mt to $485 /mt or $400 /nt to $440 /nt) ex-mill in the Midwest. But with minimills and even some integrated mills still offering discounts for large orders (at least a thousand tons) of $1.00 cwt. to $2.00 cwt. ($22 /mt to $44 /mt or $20 /nt to $40 /nt) below this range, it is evident that mills are still having difficulty filling their order books and are still competing fiercely for business.
On the cold rolled coil (
CRC) side, domestic offers have slipped, on the whole, by about $1.00 cwt. since last week, with most mills now offering at $23.00 cwt. to $25.00 cwt. ($507 /mt to $551 /mt or $460 /nt to $500 /nt) ex-Midwest mills, which is also the same range that HDG sheet base prices are offered at. US mill lead times remain short, and while mills say that business is at least decent, with a slight improvement in the amount of orders received in recent weeks, but customers balk at any attempts to increase prices and continue to only buy on an as-needed basis.
One US flat rolled supplier explained “Mills are quoting on a decent amount of business, but no one will accept even a $0.50 cwt. increase because there's just no demand yet.”
As for imports, offshore
HRC remains mostly a non-issue, except for some competitive offerings from
Mexico and
Venezuela. While Ternium has mostly been kept busy by their domestic market as of late, there are still some competitive offers from
Mexico available at $18.00 cwt. to $20.00 cwt. ($397 /mt to $441 /mt or $360 /nt to $400 /nt) at the US/
Mexico border crossing, reflecting a price drop of $2.00 cwt. since last week.
Venezuela also has some competitive
HRC offers for the US, ranging from $18.00 cwt. to $20.00 cwt. duty-paid, FOB loaded truck in US Gulf ports. Still, aside from these aggressive Latin American sources, there are virtually no
HRC import offers to speak of.
CRC is a bit of a different story, although most sources are not offering competitively enough to attract any US business away from the domestic mills, and sources say that offshore mills are becoming more reluctant to offer discounts and will, at best, match domestic offers. As with
HRC, Latin American countries are leading the way with the most competitive import
CRC offers, though they are still not really competitive when compared to domestic mill prices and lead times.
Mexico is offering at $23.00 cwt. to $25.00 cwt. at the US border crossing, which is about $1.00 cwt. less than last week.
Argentina continues to offer at $24.00 cwt. to $26.00 cwt. ($529 /mt to $573 /mt or $480 /nt to $520 /nt) duty-paid, FOB loaded truck in US Gulf ports, while
Brazil is still offering at $25.00 cwt. to $27.00 cwt. Offers from
China and
India have dropped by about $1.00 cwt. since last week with most offers now ranging from $25.00 cwt. to $27.00 cwt. ($551 /mt to $595 /mt or $500 /nt to $540 /nt) duty-paid, FOB loaded truck in US Gulf ports.
Going forward, the US flat rolled market may begin to benefit from the expected rise of
scrap prices in May, and from the continued lack of imports. However, even with rising raw material prices, limited import flow and domestic mills continuing to run at about 40 percent capacity, there is still not enough demand in the market to allow for any price increases. Rather than seeing immediate price increases accepted by customers once
scrap numbers go up, even if minimills try to push through a price hike, it is more likely that most spot deals for
HRC and
CRC will trend sideways or down further as minimills compete with each other for business, while some niche items that domestic mills don't produce much of (such as HDG products of certain sizes and coatings) will likely be the first product markets to eventually to firm up.
Recently released preliminary census data from the US Department of Commerce show that
HRC imports to the US maintained a slightly downward trend in March, with most material coming from other NAFTA countries. Out of the total 140,557 mt imported in March (compared to 151,646 mt imported in February and 173,798 mt imported in March of 2008),
Canada accounted for the most tons, with 64,210 mt. South
Korea was the second largest source in March, with 27,103 mt, though sources say these are mostly tons imported by USS POSCO from their Korean parent company.
Mexico was the third largest source for import
HRC in March, accounting for 20,067 mt. Final year-to-date data through February show that in the first two months of the year, 288,945 mt of
HRC were imported, compared to 445,077 mt in the same period of last year.
CRC imports maintained a generally stable trend in March, totaling 85,861 mt. This figure is down from 102,129 mt imported in February but up slightly from the 82,156 mt imported in March 2008. The largest sources of import
CRC in March were:
Canada, with 29,289 mt;
Brazil, at 16,364 mt; and
Mexico, with 10,922 mt. Final YTD data available through February show 194,540 mt of
CRC imports, which is almost the exact same amount that was imported during the same period of last year (194,430 mt).