US flats market stable with upside potential

While flat rolled mills' price increases a couple weeks ago ceased the price deterioration, spot prices have not begun to increase yet either. Immediately following the $2.00-$2.50 cwt. ($44-$55/mt or $40-$50/nt) price increases, customers that delayed making purchases due to price uncertainty placed orders in case prices did increase. The boost in activity firmed hot rolled coil (HRC) and cold rolled coil (CRC) spot prices, but not significantly. While HRC spots are still $29.00-$31.00 cwt. ($639-$683/mt or $580-$620/nt) ex-Midwest mill and CRC spots range from $34.00-$36.00 cwt. ($750-$794/mt or $680-$720/nt) ex-Midwest mill, the most commonly report transaction prices are now trending toward the high end for both products.

Even though the flats market is unlikely to gain any support from scrap this month considering current predictions of a slight price drop, flat rolled spots do have potential to firm in the near future. Overall, sources tell SteelOrbis that end-used demand is steady while many buyer inventories are lean; further, there is minimal import competition, which could collectively give mills some pricing power in the near future. For the time being, however, US domestic spot prices remain stable. While Mexican HRC offers of $29.50-$30.50 cwt. ($650-$672/mt or $590-$610/nt) DDP loaded truck delivered into Houston are attracting some activity from customers situated near US Gulf regions, potential buyers in areas with additional freight costs continue to shy away from the import market entirely.

**DDP loaded truck delivered into Houston