US HDG market could be on shaky ground

US domestic spot prices for coated flat steel products are stable, but wary customers could mean that stability may soon come to an end. Buyers tell SteelOrbis that one factor that has kept prices firm is mills' discipline on enforcing the price increases. While deals have not entirely disappeared from the market, the volume of sub-CRU deals has slowed substantially, and essentially all producers are adamant about enforcing higher prices following the four rounds of price increases since late May. As a result, buyer sources tell SteelOrbis that even larger customers are unable to negotiate prices under current levels.

For the next couple weeks, the market could remain tight, and prices should hold steady. Customers are generally keeping lean inventories, and are therefore regularly making buys. However, because demand has not improved along with prices over the last few weeks, activity could slow if inventory levels get too high. Imports are also part of the concern, as previously purchased futures are scheduled to begin arriving in larger numbers next month, but the major deciding factor in the US domestic market's future trend will be whether lead times remain extended once mills attempt to fill October order books.