Last week, SteelOrbis reported that US HRC prices had fallen to an average of $30.00-$32.00 cwt. ($661-$705/mt or $600-$640/nt), ex-mill, although deals up to $1.00 cwt. ($22/mt or $20/nt) below that range were available to volume buyers. Since then, prices have continued to erode.
Current US HRC prices have dipped below $30 cwt. ($661/mt or $600/nt), ex-mill, and while some have reported that the average range is trending between $28-$29 cwt. ($617-$639/mt or $560-$580/nt) for the “average buyer,” volume buyers say they can still do “$1.00 cwt. ($22/mt or $20/nt) better.”
“We think that $26 cwt. ($573/mt or $520/nt) hot rolled isn’t all that far off,” a source said. “We do think the market hasn’t bottomed out yet, but it’s likely to happen in the very near future.”
Speculation is abundant as to whether flats mills will start to roll out price increases as a means of “trying to stop the bleeding.” Whether those increases would be successful has yet to be determined.
On one hand, a source commented, market fundamentals are unlikely to support higher prices, especially considering that lead times are in some cases as short as two weeks. On the other hand, they continued, inventory levels are being drawn down significantly, and if buyers think the market has bottomed, and increases are announced, this could spur a flurry of order activity, which could push lead times out and drive prices up.
“For now, all anyone can do is stay tuned,” another source said.