US flat steel spot prices firm following increases

Despite the skepticism surrounding price increase announcements from US domestic flat rolled mills a little over a week ago, both spot prices and activity levels have improved. Whether they announced an official $2.50 cwt. ($55/mt or $50/nt) spot price increase like US Steel or issued new base prices for all flat rolled steel products like Nucor, US domestic flats mills are generally targeting $30.50 cwt. ($672/mt or $610/nt) ex-Midwest mill on hot rolled coil (HRC) and $35.50 cwt. ($783/mt or $710/nt) ex-Midwest mill on cold rolled coil (CRC). While spot prices still remain well below, they have been trending higher over the past week. Both HRC and CRC spots have firmed by about $0.50 cwt. ($11/mt or $10/nt) since last week--while many mills have been adamant about keeping HRC prices above $29.00 cwt. ($639/mt or $580/nt) ex-Midwest mill, some of the lowest prices have not been eliminated from the market just yet.

 

Still, given the sudden (although still mild) momentum generated by the increase announcements, buyers that had depleted inventories in the last couple months via buy-as-you-need purchasing patterns have reentered the market to restock, and in some cases make a few hedge buys in case prices continue to increase. Mills could, however, encounter some resistance once US domestic scrap prices settle for June--current expectations are for a slight decline. One factor working in mills’ favor is the lack of much import competition, at least in the Midwest (West Coast mills continue to compete with significantly lower CRC offers out of China). Mexican HRC continues to be an option, but is only really viable for those situated near US Gulf ports. The import offers are stable from a week ago but are likely to move alongside US domestic spot prices. 

 

 

 

**DDP loaded truck delivered into Houston ports