US flats activity increases slightly, but prices still weak

Sources tell SteelOrbis that they've noticed a slight bump in US spot market activity in the last week, but it's not enough to stop flat rolled prices from falling further. It is not yet certain what led to the increased buying activity this week--the idling of RG Steel's three mills, improved demand or simply low inventories that have been depleted from weeks of little to no purchasing--but it's unlikely that it will be enough to stave off downward pressure from an anticipated scrap price drop of about $30/lt this month. Consequently, US domestic hot rolled coil (HRC) spot prices are likely to drop further from their current range of $31.00-$32.00 cwt. ($683-$716/mt or $620-$650/nt) ex-mill; already, there is increased activity heard under the range for large buyers. Cold rolled coil (CRC) spots are also unchanged in the last week, but once HRC prices drop again, CRC will follow suit.

As for imports, trader sources indicate that while they are able to book orders for certain specialty items, US buyers aren't interested in booking commodity products offshore. While Chinese CRC offer prices could fall again in the next couple weeks, it's unlikely that the drop will be enough to spur any measurable import activity. Mexico continues to offer HRC at prices similar enough to US domestic spot prices that there have been a decent amount of bookings in the last couple weeks. As usual, Mexican mills are expected to continue mirroring US domestic price moves in order to keep up activity.

**DDP loaded truck delivered into Houston