US flat rolled prices are continuing on their downward trend as mill business is slow and raw material costs have decreased.
In the last few weeks, spot prices for both hot rolled coils (HRC) and cold rolled coils (CRC) have come down a few notches. US business is slow as automotive and residential construction markets are dim, leaving demand for these products pretty weak. On top of the weak demand, though, the buyers that would usually at least be replenishing their stocks on-hand for their usual jobs at around this time have not been buying. Some say that the current lack of buying activity has less to do with supply and demand than it does market psychology - It is quite clear that prices are coming down, so unless it's absolutely necessary, buyers are holding off and waiting until the prices come down another notch before making any purchases.
Domestic HRC prices are trending down, with spot prices ranging from $51.00 cwt. to $53.00 cwt. ($1,124 /mt to $1,168 /mt or $1,020 /nt to $1,060 /nt) ex-mill Midwest, though some customers tell SteelOrbis that they are finding HRC priced below $50.00 cwt. ($1,102 /mt or $1,000 /nt).
With the weak US demand, domestic mills have been attempting to export some HRC to other countries, but they haven't been getting too much traction. US mills are said to be offering HRC at approximately $47.00 cwt. to $48.00 cwt. ($1,036 /mt to $1,058 /mt or $940 /nt to $960 /nt) FOB mill to offshore buyers, but with the global economy on a slight downtrend itself, the US mills are not getting too much business.
On the CRC side, business is slower, and the market is, overall, much softer than the HRC market. More and more contract tons have been making their way into the market at lower numbers than the mills' offering price, thereby lowering the accepted price range for CRC. For CRC, spot prices are as low as $53.00 cwt. to $55.00 cwt. ($1,168 /mt to $1,213 /mt or $1,060 /nt to $1,100 /nt) ex-mill Midwest, with prices expected to continue trending slightly downwards.
Also adding to the slow domestic market situation is cheaper imports. Though buyers are not too interested in buying, period, when lower numbers are available, the buyers that need tonnage are taking advantage. Both HRC and CRC from Mexico are available at lower-than-domestic numbers. HRC from Mexico is being offered at or below $45.00 cwt. ($992 /mt or $900 /nt) at the border, while CRC from Mexico is being offered at approximately $48.00 cwt. to $49.00 cwt. ($1,058 /mt to $1,080 /mt or $960 /nt to $980 /nt) at the border.
Chinese offers are also trending down, though they are still not too attractive for US buyers. Chinese CRC offers are in the range of $51.00 cwt. to $53.00 cwt. ($1,124 /mt to $1,168 /mt or $1,020 /nt to $1,060 /nt) FOB loaded truck, West Coast ports.
Realistically, traders have to offer Chinese CRC at significantly below the domestic price to get any traction from buyers, especially since the domestic market is trending down, and offshore material will not be arriving in the US until December.