US flat steel prices continued their recent move to the downside this week as late-August spot market demand continued to unimpress even as the outlook for September scrap pricing continued sideways to lower for a third week. As flat steel price levels approach values not seen since before tariffs went into effect in early March, market insiders told SteelOrbis pricing could be setting up to bottom at around $800/nt ($882/mt) or $40.00/cwt., in the near term.
Insiders said the effect of tariff-reduced reduced imports and reports of growing order backlogs at mills could prevent continued price erosion into the sub-$800/nt levels, especially since reduced flat steel production is likely to provide price support once mills begin to shutter operations to perform annual maintenance programs starting next month.
“Right now prices are pretty flat because of low demand,” remarked one US Gulf Coast market insider. “I know that sounds boring, but that is the reality we are seeing right now.”
And while late reports of HRC trades in the “sub-$800/nt level” were reported, those trades were unable to be verified as of presstime.
The SteelOrbis spot average price for hot-rolled coils is assessed $5/nt less at an average of $820/nt ($904/mt) or $41.00/cwt., off from $825/nt ($909/mt) or $41.25/cwt., seven days ago. Weekly SteelOrbis pricing data reveals this week’s HRC assessment represents the lowest price level for HRC recorded since mid-May when HRC averaged $835/nt ($920/mt), or $41.75/cwt. Even lower HRC pricing in the high-$30/cwt. range was seen in mid-February just prior to announcements from the US Trump administration of renewed steel and aluminum tariffs that would begin in March.
“We see positive things regarding demand,” remarked Nucor Corporation Executive Vice President of Sheet Products, Noah Hanners, at this week’s SMU Steel Summit conference in Atlanta, Georgia, when asked about this week’s Consumer Spot Price (CSP) increase for hot-rolled coils, the first reported by the key US mill in three weeks to $875/nt ($965/mt) or $43.75/cwt. “This week’s price increase has nothing to do with tariffs at all, but rather we see a developing backlog of orders coming from customers, which is supportive of demand.”
Another SteelOrbis flat steel insider remarked, “There is a mix of opinions in the marketplace right now, however, there is a general feeling that demand is going up in certain sectors as people return from vacations,” he said. “The mills definitely have felt an increase of volume on quotes, but companies are looking for lower prices and mills are not closing orders,” he added. “Scrap values are staying the same versus prices that are coming down, so that is reducing margins with the mills. To me it feels like HRC prices will not decline below $800/nt.”
Market insiders tell SteelOrbis spot trading action also remains limited as steel industry participants react to the new set of steel derivative products, now subject to 50 percent tariffs. As previously reported by SteelOrbis, on Aug. 18, the US Commerce Department announced a major expansion of Section 232 trade measures, adding 407 new product codes of steel and aluminum derivative products subject to tariffs. The decision, broadens the scope of duties and affects a wide range of industries.
In other flat steel markets, spot CRC pricing once again followed HRC prices down, giving up another $5/nt to a weekly average of $1,040/nt ($1,146/mt), or $52.00/cwt. Even though more weekly declines for HRC and CRC pricing were noted, the weekly key price spread between the two key steel grades remained steady at $220/nt or $11.00/cwt.
In the coated steel markets, spot HDG grade steel slipped the most, falling $25/nt to on average $945/nt ($1,042/mt) or $47.25/cwt., off from $970/nt ($1,069/mt), or $48.50/cwt., one week earlier.