US import flat rolled prices continue to drop

While US domestic mills are trying to raise spot prices or at least keep them steady, Chinese import offer prices to the US are rapidly falling. Chinese cold rolled coil (CRC) import offer prices to the US are approximately $34.50-$35.50 cwt. ($761-$783/mt or $690-$710/mt) DDP loaded truck in US Gulf  ports (prices delivered to the West Coast are within a similar range), down about $1.00 cwt. ($22/mt or $20/nt) since last week. Some deals for Chinese CRC have been heard even slightly below as some second tier mills vie for market share in the US amid rapidly eroding flat steel prices locally in China. Hot rolled coil prices in China have been falling quickly as a result of little demand and declining iron ore prices, and trader sources have indicated that this downtrend doesn't appear to be slowing down just yet.

The declining Chinese CRC offers are hitting the US West Coast especially hard, where US domestic spot prices for CRC are currently $38.00-$39.00 cwt. ($838-$860/mt or $760-$780/nt) ex-West Coast mill, well above Chinese prices. Chinese CRC prices in the US also remain below West Coast hot rolled coil (HRC) spots which are currently around $36.00 cwt. ($794/mt or $720/nt) ex-West Coast mill, but deals under the range have been reported for large volume buyers. As for the US Midwest, both HRC and CRC spot prices are still stagnant from last week and no major moves up or down are expected until at least a few days after the Labor Day holiday when scrap prices for September settle and labor contracts between the USW union and ArcelorMittal and US Steel, respectively, either expire or are signed--as mentioned last week, if there is no work stoppage, it is believed that US spot prices could begin to decline soon after.

**DDO loaded truck delivered into Houston