US flats prices begin to firm following two announced increases

A second $2.00 cwt. ($44/mt or $40/nt) price increase in the US domestic flats market this past week appears to have given the initial increase some stability and spot prices have firmed. US flats mills have been quoting approximately $32.00 cwt. ($705/mt or $640/nt) ex-mill on hot rolled coil (HRC) this past week, although official prices following the two announced increases during July put HRC prices at around $33.50-$34.00 cwt. ($739-$750/mt or $670-$680/nt) ex-mill. Sources tell SteelOrbis that mills have allowed customers to lock in orders this past week at prices closer to $31.00 cwt. ($683/mt or $620/nt) ex-mill, but are likely to begin pushing for higher prices in the next couple weeks, especially following a $70/lt boost in domestic scrap prices for August in some regions.

Although spot prices are expected to inch higher in the next couple weeks, buyers have been in no rush to place orders and are still only making as-needed purchases. Additionally, a number of distributors have indicated that they are actually trying to reduce inventories where they can as there remains little confidence that the current uptrend has long term strength. And that is precisely the reason why US buyers aren't willing to make any big overseas purchases right now, although for a firm order, Chinese mills have been willing to negotiate prices about $0.50-$.75 cwt. ($11-17/mt or $10-$15/nt) below the current offer range of $35.50-$36.50 cwt. ($783-$805/mt or $710-$730/nt) DDP loaded truck in US Gulf ports.

*DDP loaded truck in US Gulf ports

**DDP loaded truck delivered into Houston