US domestic HRC and CRC spot prices have remained unchanged for the second consecutive week, leading many in the market to believe prices have peaked and will soon start to drop. While that belief is in direct contraction with US mills releasing forecasts that Q4 will be another record quarter of profits, sources tell SteelOrbis that mills are only projecting a bullish forecast because fourth quarter prices are the basis for yearly contract prices.
The main factor that will determine how much and how fast US flats prices drop is the import trend. US import HRC offers to the US have reportedly reached $75.00 cwt. ($1,654/mt or $1,500/nt) DDP loaded truck in US Gulf ports, which is $20.00 cwt. ($441/mt or $400/nt) lower than current domestic HRC offerings. One source said that he wouldn’t be surprised if US flats mills announced another price increase, not as a way to actually lift prices, but as a strategy to keep prices flat.
For now, sources think US flats prices will start to drop as early as October, with downward momentum gaining in November and December. This week, US flats prices are steady at $95.00-$97.00 cwt. ($2,094-$2,138/mt or $1,900-$1,940/nt) ex-mill for HRC, and $106.00-$109.00 cwt. ($2,337-$2,403/mt or $2,120-$2,180/nt) ex-mill for CRC.