US flat rolled steel prices have continued to revise downward since our last report a week ago, and market players believe that current downtrend still has a bit to go before prices bottom out.
Current HRC prices are down by another $2.00 cwt. ($44/mt or $40/nt) since our last report a week ago and are now being heard at roughly $46-$48 cwt. ($1,014-$1,058/mt or $920-$960/mt) FOB mill.
CRC and HDG prices have softened as well. This week’s prices for both products are also down by approximately $2.00 cwt. ($44/mt or $40/nt), and as such, the most commonly heard transaction range for these products is being heard at approximately $58.50-$60.50 cwt. ($1,290-$1,334/mt or $1,170-$1,210/nt) FOB mill.
Similar to last week, deals below these ranges continue to be heard within the marketplace based on tonnage. All sources polled believe that the market will continue to soften in the upcoming weeks. The big question is where prices will ultimately settle.
One source said he believes that HRC will not bottom until it’s at or below $40 cwt. ($882/mt or $800/nt), with HDG and CRC settling at or close to $50 cwt. ($1,102/mt or $1,000/nt), both FOB mill. Another said that none of this is surprising, as imports are up and scrap are down.
Others, on the other hand, are less pessimistic. “Looking at futures it seems like HR should settle in Mid $800’s (short ton) but I think mills will do all they can to keep it at $900 (short ton) range and would like to keep HD/CR at $1100 (short ton),” another source said. “All speculation on my part of course but from my view in the Southeast the market continues to be strong with many new large construction projects announced or already started.”
A final source said that although there is currently a mild pullback on price, which is commensurate with recent softness seen in scrap pricing, he does not believe the market will fall back to $40 cwt. ($882/mt or $800/nt), FOB mill.
“I think it will level out at $45 cwt. ($992/mt or $900/nt),” he said. “[After that I think prices will start] pushing back to over $50 cwt. ($1,102/mt or $1,000/nt) for the next cycle.