US flat steel prices rebounded this week, increasing on average $9/nt, after falling to the lowest levels on record since late-February this past week. Market insiders said flat steel pricing rose in anticipation of an expected quarter point cut in overnight lending rates next week.
While spot trading remained extremely thin, flat steel insiders said the combination of a much-anticipated US Federal Reserve rate cut, the likelihood of continued low imports as a result of 50 percent steel tariffs, as well as growing reports of low inventories at mills, could lend much needed support to flat steel pricing going forward.
“We see scrap pricing staying sideways into October, and interest rate cuts likely this month, all the while imports are continuing to dry up,” remarked one US Gulf Coast flat steel insider.
According to media reports this week, key steel analysts think steel prices could be poised for an increase. “Trader sources note a sharp drop in import appetite and competitiveness, which we expect to fuel less supply and higher US sheet prices in the fourth quarter,” said Wells Fargo analyst Timna Tanners on Wednesday.
Market insiders continue to tell SteelOrbis they think there is considerable “pent up demand” for steel and steel products, likely to emerge from the US manufacturing and construction sectors that could be waiting on the eventuality of lower interest rates. Financial market analysts say there is currently a 76 percent chance that interest rates will be cut at least one-quarter point at the next Federal Reserve Open Market Committee meeting Sept. 16-17. Many expect at least two more quarter-point cuts for the remainder of 2025. Overnight lending rates have remained steady at 4.25-4.50 percent since December 2024 as a result of inflation and employment concerns at the Fed, especially since steel, aluminum and reciprocal tariffs went into play earlier this year.
The SteelOrbis spot average price for hot-rolled coils on an FOB mill basis was reported in an $810-820/nt range, with most transactions noted at $814/nt ($897/mt), or $40.70/cwt., up from on average $805/nt ($888/mt) or $40.25/cwt., one week earlier. While prices did rise this week, SteelOrbis data shows pricing still is at the 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 higher, rising $5/nt to on average $1,040/nt ($1,146/mt), or $52.00/cwt., up from $1,035/nt ($1,141/mt), or $51.75/cwt., one week earlier. Given increases in both key steel grades, the current spread between HRC and CRC stands at $226/nt ($249/mt), or $11.30/cwt., up $4/nt from $230/nt ($254/mt), or $11.50/cwt., one week prior.
In the coated steel markets, spot HDG grade steel also rose $9/nt to on average $944/nt ($1,041/mt), or $47.20/cwt., up from $935/nt ($1,031/mt), or $46.75/cwt., seven days ago.