LAS VEGAS The flat-rolled
steel import market continues to drag on the back of weak
domestic demand and increased prices for foreign material,
Hot-rolled offers have been
minimal in recent months due to softening U.S. prices and a
lack of foreign sources. Coil offers from Russia, which were
popular and competitive last year, have become nonexistent as
the revised suspension agreement with Russia has resulted in
higher prices. Outside of Russia, little opportunities for
hot-rolled exist, sources say.
"Its really tough right
now and its pretty quiet. The U.S. mills are looking for
business and ways to move steel. Price hikes arent
sticking and were all waiting to see what will happen,"
one trader said. "Last year there were Russian coils, but now
there arent any places to get hot-rolled from."
Much of the weakness in the
import market is due to sustained softness in domestic prices,
according to sources.
Russian hot-rolled steel into
the Port of Houston was reportedly quoted around $600 per ton
($30 per hundredweight), slightly below domestic prices of $630
per ton ($31.50 per cwt)not enough of a spread to make it
worthwhile to buy foreign material, buyers said. Some market
participants said coils from Turkey were on the water and are
expected to hit U.S. shores in the coming weeks.
On the cold-rolled side, much of
the Chinese material bought in the latter half of 2012 has hit
U.S. shores in recent weeks. But a number of traders reported
that Chinese mills hiked prices, making the product
uncompetitive in the U.S. market.
"Things are very dull. The
Chinese raised their prices ... and there (arent many)
foreign flat-rolled opportunities," a second trader said. "I
dont think anyone is really buying foreign today unless
theyre far from a domestic mill."
Increased prices, coupled with
the upcoming Chinese New Year holiday, will keep the Chinese
"out of the market" for a while, traders added.
Most of the Chinese cold-rolled
material booked in the second half of last year will continue
to arrive through the end of February, a third trader said. New
offers for Chinese cold-rolled product are difficult to find on
the East and Gulf coasts, with Chinese cold-rolled material
currently quoted at $720 to $750 per ton ($36 to $37.50 per
cwt). Transactions for Chinese material into the Northeast had
been reported at $650 to $665 per ton ($32.50 to $33.25 per
cwt) in the fall (
amm.com, Sept. 5).
Domestic mills have yet to be
disciplined enough to fully enforce recent price increases,
causing difficulty in the market, a fourth trader said.
"Theres a lot of negotiation and wait and see. There
doesnt seem to be enough demand to see the recent
increases stick," he said.
Market participants in India
have also reportedly increased export prices for galvanized
product, which has also made it difficult to sell in the U.S.
But some see bright spots ahead,
especially amid expectations that steel demand will improve in
the near term.
"I do expect demand to get
stronger; thats what all the indicators say," the first
trader said. "But at the end of the day, its a matter of
too much production."