Will the US HRC trade case announcement shake up the domestic market?

Friday, 05 August 2016 00:17:58 (GMT+3)   |   San Diego
In mid-March, the US Department of Commerce announced affirmative preliminary determinations in the antidumping duty investigations of certain hot rolled steel flat products from Australia, Brazil, Japan, Korea, the Netherlands Turkey and the UK.

At that point, the lowest preliminary margins were assessed against Korean steelmakers, at 3.97-5.65 percent while mills in the UK received the highest preliminary margins, at 49.5 percent. US HRC spot market prices have spiked since that announcement was made.
 
In mid-March, SteelOrbis reported that the most commonly heard spot price transaction range for US domestic HRC was trending at $20.50-$21.50 cwt. ($452-$474/mt or $410-$430/nt), ex-Midwest; today that range is being heard at $30-$31 cwt. ($661-$683/mt or $600-$620/nt). This week’s range reflects an approximate $1.00 cwt. dip from last week.

Today, with a few exceptions, final margins followed closely with preliminary margins (see chart below). Although many within the US feel today’s announcement “adds to a protectionist market, which is what the domestic mills wanted,” it’s unlikely to have much of an impact on the slow, downward drift in pricing the domestic US HRC market has recently endured.

“Everything went up really fast and no one thought prices could sustain at the higher levels, especially in the absence of any meaningful activity out of the pipe mills,” one source said.  “The general sense is that while HRC prices aren’t expect to crash, they will see some additional correction before things level out.”
 
Country, Producer/Exporter Preliminary AD Final  Preliminary CVD Final
         
Australia, Blue Scope Steel 23.25% 29.37% not applicable  
Australia, all others 23.25% 29.37%    
Brazil, CSN 33.91% 33.14% 7.42% 11.30%
Brazil, Usiminas 34.28% 34.28% 7.42% 11.09%
Brazil, all others 33.91% 33.14% 7.42% 11.20%
Japan, JFE Steel Corp. 6.79% 7.51% not applicable  
Japan, Nippon Steel  11.29% 4.99%    
Japan, all others 10.24% 5.58%    
Korea, Hyundai  3.97% 9.49% 0.63% 3.89%
Korea, POSCO 7.33% 3.89% 0.17% 57.04%
Korea, all others 5.65% 5.55% 0.00% 3.89%
Netherlands, Tata Steel  5.07% 3.73% not applicable  
Netherlands, all others 5.07% 3.73%    
Turkey, Colakoglu 7.07% 7.15% 0.38% 0.34%
Turkey, Erdemir 5.24% 3.66% 0.23% 6.01%
Turkey, all others 6.82% 6.67% 0.00% 6.01%
UK, Tata Steel U.K. Ltd. 49.05% 33.06% not applicable  
UK, all others 49.05% 33.06%    

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