US flat steel prices slipped this week as the price of May ferrous scrap continued to flounder amid continued uncertainty over existing Section 232 steel tariffs and new reciprocal tariffs that could complicate the transportation of imported steel and other commodities moving forward, market insiders said.
On April 9, US President Trump delayed the implementation of reciprocal tariffs for 90 days on a host of nations that currently trade with the US. After lowering the floor rate to 10 percent on all trading partners, Trump said he delayed the start of country-specific reciprocal tariffs to give many countries more time to re-negotiate their individual tariff amounts with the US. China, after deciding it would retaliate against the US, remains at 145 percent combined tariffs.
Section 232 tariffs for all US global steel and aluminum trading partners remain at 25 percent with no exceptions as of yet granted. Many insiders said they expect Trump will offer concessions to the US’s two largest trading partners Mexico and Canada, in order to save the USMCA agreement he engineered during his first term.
Shipping experts said because so much of the global shipping fleet is built, owned and operated by Chinese concerns, high tariffs on the communist nation could cause shippers to choose to bring product to the US on other country’s ships, or to consolidate shipments onto larger carriers or to use larger ports, thus lowering the unit cost per item shipped. A new plan announced by by the Trump administration April 17 will levy a fee of $50/nt on all Chinese-built ships as of October 14, with the fees increasing $30/nt per year over the next three years.
“We are definitely seeing flat steel prices moving lower on just about all products with the exception of coated steel,” said one US flat steel insider. “Demand at current is pretty lackluster, and the panic buying that we saw recently because of the tariffs seems to be over,” he said. The contact added that current inventories of flat steel seem to be more than sufficient, especially since the announcement of tariffs. “I am still concerned about demand, so when I take my daily trips back and forth to and from work, I can see back yard lots at customers are full of steel, so that is concerning to me from a price perspective.”
In weekly flat steel spot markets, the SteelOrbis weekly spot average for hot rolled coils (HRC) fell on average $50/nt ($55/mt) to $875-925/nt ($965-1,020/mt), or on average $900/nt ($992/mt), or $45.00/cwt. This week’s price represents the lowest price recorded since mid-March, SteelOrbis data shows.
“Mills are offering HRC well below $900/nt right now,” the flat steel insider added, mentioning the declining price of scrap. “I think we could see May scrap down $30-40/gt ($30-41/mt), because lead times are short at 3-4 weeks, indicating demand remains low, and Turkey is not buying very much scrap from the US. Most of it is coming from Europe.”
“Another round of buying will be triggered if we see prices hit the high-$800/nt levels,” said yet another flat steel insider.
On the mill side, Nucor’s Consumer Spot Price (CSP) declined marginally this week, following three weeks of stability, with the steelmaker lowering its CSP to $930/nt ($1,025/mt) FOB mill, or $46.50/nt. Prior to this week’s decline, pricing from Nucor was stable at $935/nt ($1,031/mt). Steel insiders continue to say that mills remain reluctant to raise posted prices for fear of losing market share to imports.
In the cold rolled markets, following earlier increases, spot CRC is assessed on average $27/nt ($30/mt) less on a delivered basis at $1,140-1,155/nt ($1,257-1,273/mt), or on average $1,148/nt, off from $1,175/nt ($1,295/mt), or $58.75/cwt., one week ago. At present, the current key trading spread between HRC and CRC rose by $23/nt to $248/nt ($273/mt), or $12.40/cwt.
Spot HDG is assessed $32.50/nt less at $1,115-1,120/nt ($1,229-1,235/mt), or $55.75-56.00/cwt., off from $1,150/nt ($1,268/mt), or $57.50/cwt., on a customer delivered basis a week earlier, market insiders told SteelOrbis.