US flat steel prices gave back previous gains seen this past week amid reports of continued lackluster flat steel demand, coupled with market surveys of scrap market insiders finding a growing expectation for a sideways to lower direction for scrap pricing next month, market insiders told SteelOrbis.
Last week, ahead of the Federal Reserve’s one-quarter point rate cut on Sept. 17, flat steel insiders told SteelOrbis prices moved up a bit as a result of renewed optimism that the much-anticipated Fed cut in overnight bank lending rates could help stimulate steel demand from the construction, manufacturing and housing sectors of the economy. Some said following the cut, however, that its effect on pricing remained minimal as it was largely expected and already factored into pricing models.
And while US mills currently report solid monthly September scrap shipments, demand for scrap is expected to dip in the near term as many US mills begin to shutter production as part of annual maintenance operations. Some predicted continued flat scrap pricing during October and November supply negotiations, with a potential for price increases most likely starting in the new year.
“Scrap inventories at mills remain decent,” said one US Midwest scrap dealer. “However, order books (for finished steel) are said to be looking pretty weak through the end of the year.”
The SteelOrbis spot average price for hot-rolled coils on an FOB mill basis was reported on average $810/nt ($893/mt), or $40.50/cwt., off from $814/nt ($897/mt), or $40.70/cwt., one week prior. While prices moved slightly lower this week, SteelOrbis data shows pricing remains at its lowest point since just prior to US President Trump’s announcements of renewed 25 percent Section 232 steel tariffs on Canada and Mexico in February.
In other flat steel markets, spot CRC followed HRC prices lower, falling a more sizable $30/ton to on average $1,010/nt ($1,113/mt), or $50.50/cwt., off from $1,040/nt ($1,146/mt), or $52.00/cwt., one week ago. Given declines in both key steel grades, the current spread between HRC and CRC stands at $200/nt ($221/mt) or $10/nt, off from $226/nt ($249/mt), or $11.30/cwt., seven days ago.
In the coated steel markets, spot HDG grade steel also fell a more substantial $24/nt to on average $920/nt ($1,014/mt), or $46.00, off from $944/nt ($1,041/mt), or $47.20/cwt., one week earlier.