Much to the dismay of US flat rolled market steel professionals, prices declined again in the past week.
Most domestic hot rolled coil (HRC) spot prices decreased by about another $1.00 cwt. ($22 /mt or $20 /nt) from our report last week and are now in the range of approximately $22.00 cwt. to $24.00 cwt. ($485 /mt to $529 /mt or $440 /nt to $480 /nt) ex-mill in the Midwest. Considering that demand remains extremely week, domestic mills may still be willing to negotiate deals at the bottom of this range for significant tonnage and quick orders.
Meanwhile, domestic cold rolled coil (CRC) spot prices have also decreased since last week, by roughly the same margin as HRC, $1.00 cwt. ($22 /mt or $20 /nt), and are now being offered for around $26.00 cwt. to $28.00 cwt. ($573 /mt to $617 /mt or $520 /nt to $560 /nt) ex-mill in the Midwest. CRC prices could also be negotiated in most circumstances depending on order specifics.
A consistency in today's flat rolled market is the persistence of domestic mills in keeping prices down, thus preventing foreign mills from generating any legitimate buyer interest. Lead times alone, in this turbulent economy, will make it difficult for most import offers to be booked. And now that domestic mills have pretty much taken away any price benefits from import offers, foreign mills find themselves struggling just to stay active in the US market.
Nonetheless, most foreign sources have demonstrated their willingness to at least try and compete in the US flat rolled market, by lowering prices again this week; however, it appears not to be enough for potential buyers to consider booking.
It is safe to say that the most active and most competitive flat rolled import offers to the US are coming on the HRC side from Mexico and Venezuela. While Mexico is aided by their proximity to the US border, Venezuelan mills have become increasing aggressive with most orders. Mexican HRC offerings remained neutral from last week and continue to be in the range of approximately $22.00 cwt. to $24.00 cwt. ($485 /mt to $529 /mt or $440 /nt to $480 /nt) delivered to the US at the border crossing. However, while Mexican prices remained unchanged from last week, mills continue to be aggressive and may be willing to offer discounts depending on size and order specifics. Meanwhile, Venezuelan HRC offers to the US are hovering at around $22.00 cwt. ($485 /mt or $440 /nt) duty-paid, FOB loaded truck in US Gulf ports.
Turkey is also attempting to be competitive with import HRC offers to the US in the range of around $22.00 cwt. to $23.00 cwt. ($485 /mt to $507 /mt or $440 /nt to $460 /nt) duty-paid, FOB loaded truck in US Gulf ports, but long lead times and the lack of available vessels are preventing just about all offers from being booked.
On the CRC side, the primary foreign importing sources of India, Mexico, Brazil, Argentina and Turkey are all offering imported CRC to the US in the general range of $26.00 cwt. to $28.00 cwt. ($573 /mt to $617 /mt or $520 /nt to $560 /nt). Indian, South American and Turkish offers are duty-paid, FOB loaded truck in US Gulf ports, while Mexican offers are delivered to the US at the border crossing. India reduced their offerings by $2.00 cwt. ($44 /mt or $40 /nt) from last week, while Mexico, Brazil and Turkey reduced their offerings by about $1.00 ($22 /mt or $20 /nt) over the past week.
Updated licensing data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total imports of HRC tonnage to the US during February amounted to about 157,699 mt, the highest total since October. The US' bordering neighbors, Canada and Mexico, accounted for more than half of the total imported HRC tonnage in February, with 86,298 mt; 52,052 mt and 32,246 mt respectively.