Wheels on US domestic flat rolled cart continue to loosen

The market is coming apart quickly at a quickening pace, and while mills are attempting to hold pricing, overwhelmingly soft order books are leading many to falter at the last minute.  The last round of price increase announcements, seen in late August, have come and gone without even the slightest bit of acknowledgement-those who need to purchase coils are well aware that they have the upper hand at the bargaining table.  

Lead times for HRC and CRC, two to three weeks and three to four weeks, respectively, are leaning toward the quicker side of those ranges, with increased chatter about occasions in which product has been ordered and received even sooner than that in some cases. Needless to say, if you want product delivered by the end of this month, you can probably get it.

"Everyone expects pricing to go down, so buyers are waiting until the last minute to place orders," said one East-coast buyer, noting that while demand hasn't come off, the biggest challenge lies in the marketplace still experiencing an oversaturation of steel.   At the same time, though, demand isn't exactly what many would refer to as "great",  and as the holidays are fast approaching, holding consistent with patterns seen in previous years,  it will likely begin to taper off before it picks back up again with orders for 2011 deliveries.

A potentially positive development, however, is the idling of US Steel's Canadian-based Hamilton Plant. While that has not translated into overall reductions in production, "lots of mills are now talking about following suit,"  which could be a large step in the right direction.

For now, the trend for US domestic HRC and CRC will remain down, with the expectation that prices will bottom out in November.  Although the ranges listed below represent the most commonly reported transaction pricing, reports that orders at the higher end of the numbers listed below are fading quickly.

Looking to imports, interest is waning due to the resumed downward trend of domestic pricing.  Due to import pricing remaining neutral since our last report a week ago, overseas and south-of-the border offerings aren't garnering much attention.

*Mexican offers are FOB loaded truck US border states.

**Chinese and Brazilian offerings are duty-paid FOB loaded truck, US Gulf ports