US domestic hot rolled coil prices have continued to soften in the past 7 days, sources note, adding that despite the fact that Korean mills are offering HRC to the US “at below $40 cwt. ($882/mt or $800/nt),” US buyers are concerned enough about domestic prices falling that few, if any, are willing to book offshore.”
For example, although the “official” US HRC price range is down by $2.00 cwt. ($44/mt or $40/nt) week-over-week, to $54-$56 cwt. ($1,191-$1,235/mt or $1,080-$1,120/nt), FOB mill, sources have said that “domestic deals in the mid $40’s have been heard within the marketplace, with much shorter lead times than what’s being reported.”
And while deals that far below the most commonly heard transaction range “are most certainly an outlier,” sources say they think it’s just a matter of time before sub $50 cwt. ($1,102/mt or $1,000/nt) becomes the new norm.
CRC prices, on the other hand, are “mostly steady,” in the past week, with most transactions still taking place at roughly at $65-$66 cwt ($1,433-$1,455/mt or $1,300-$1,320/nt), FOB mill, whereas HDG prices have softened by $1.00 cwt. on the bottom end, to an average range of $64.50-$66.50 cwt. ($1,422-$1,466/mt or $1,290-$1,330/nt), FOB mill. Lead times for both of these products are trending at approximately 6-8 weeks.
Similar to what’s been heard with hot rolled coil, CRC and HDG deals below the most commonly heard transaction ranges are said to be available based on volume.
“I think now that the price trend has reversed, you have a lot of people who are going to back away to the sidelines until they absolutely need steel,” a source said. “I think the general consensus is that this is the beginning, not the end, and no one wants to get stuck with high priced inventory, and because fewer people will be buying, prices will continue to trend down.”