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Flat-roll import market quiet on demand lull

Keywords: Tags  steel imports, hot-rolled coil, cold-rolled sheet, import prices, steel prices, flat-rolled steel, Catherine Ngai


LAS VEGAS — The flat-rolled steel import market continues to drag on the back of weak domestic demand and increased prices for foreign material, traders say.

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.

"It’s really tough right now and it’s pretty quiet. The U.S. mills are looking for business and ways to move steel. Price hikes aren’t sticking and we’re all waiting to see what will happen," one trader said. "Last year there were Russian coils, but now there aren’t 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 (aren’t many) foreign flat-rolled opportunities," a second trader said. "I don’t think anyone is really buying foreign today unless they’re 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. "There’s a lot of negotiation and wait and see. There doesn’t 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. market.

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; that’s what all the indicators say," the first trader said. "But at the end of the day, it’s a matter of too much production."


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