The weeks-long price decline within the US domestic hot rolled coil (HRC) markets has continued. Last week, SteelOrbis reported an average spot market price transaction range of $27.00-$28.00 cwt. ($595-$617/mt or $540-$560/nt), ex-mill, with speculation that $26 cwt. ($573/mt or $520/nt) ex-mill HRC was on the horizon.
That price point is now available in the marketplace, with current prices spanning between $26.00-$28.00 cwt. ($573-$617/mt or $520-$560/nt), ex-mill. One source close to SteelOrbis indicated that volume buyers are able to negotiate deals below this range.
Another source described the current state of the market as a “problem of mills’ own making.”
“If you look at the import stats, hot rolled imports are down by about 90,000 tons a month from where they were this time last year, which was the whole point of Section 232,” he said. “But if you look at [domestic mills’] capacity utilization rates, that’s gone up by 4 percent in the past year. The mills are making more steel than the market can absorb.”
As such, news that at least two domestic flat rolled steel mills are planning to idle blast furnaces, or tamp down production, is welcome.