Spot market prices for US domestic hot rolled (HR) cold rolled (CR) and hot dipped galvanized (HDG) coil are mixed bag this week, as prices for two of the three commodities have softened while prices for the third have ticked up.
As of Friday April 28, the most commonly heard transaction price for US domestic HRC is trending at $57.00-$58.50 cwt. ($1,257-$1,290/mt or $1,140-$1,170/nt), FOB mill, whereas US CRC prices are being heard at $67.00-$68.50 cwt. ($1,477-$1,510/mt or $1,340-$1,370/nt), FOB mill. This week’s ranges have softened by approximately $0.50 cwt. ($11/mt or $11/nt) on the top end in the past seven days.
Domestic HDG coil prices, however, have firmed by $2.00 cwt. ($44/mt or $40/nt) since our last report and are now trending at $66.50-$68.50 cwt. ($1,466-$1,510/mt or $1,330-$1,370/mt), FOB mill.
Sources throughout the US are in agreement that the months-long uptrend in sheet steel prices is “officially over,” with HDG sources pointing out that despite this week’s HDG trend, the fact that coated steel prices are still at or below CRC prices remains an anomaly.
“It really defies logic,” one source said. “I think we could see some stability for HDG in the next week while CRC continues to come down.”
Other sources noted that the forecast dip in May settled scrap prices is also worth keeping an eye on.
“It sounds like down $20-$30/gt is all but guaranteed, but the big question is whether mills will try to take the market down $50-$70/gt like some suspect they will,” another source added, noting that it's widely suspected that flat rolled buyers will place pressure on mills to reduce spot market prices once the scrap market settles.
“This all makes sense when you think about it,” a final source said. “If the mills think that [finished steel] prices are going to come down, they’re going to want to preserve their margins. They’re going to have to get their pound of flesh from somewhere, and the fact that scrap is expected to come down isn’t all that shocking.”