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China cold-roll tags dip but buyers still waiting

Keywords: Tags  Chinese cold-rolled sheet, steel traders, steel prices, Commerce, Lunar New Year, catherine ngai

NEW YORK — Chinese cold-rolled sheet prices into the United States have started to pull back after a run up in the weeks leading up to the country’s Lunar New Year holiday in mid-February, but traders say the flat-rolled product is still a hard sell into the U.S. market due to a narrow price spread between domestic and foreign material.

"China is coming back down the hill again pricewise, but no one is making a big bet on imports right now," one steel trader said. "The prices aren’t as low as the September/October period ... and even though they’ve come down from where they were (before the Lunar New Year), they’re nowhere near where they were back in the fall."

A second trader confirmed the lower offer prices, but agreed they weren’t low enough to encourage would-be buyers to take a risk on imported material with longer lead times.

"The Chinese went down last week," said the second trader, citing a $15- to $20-per-tonne decrease. "People are still looking at buying (only) what they need. The fact is that with the long lead times ... it’s a problem. It’s going to be a gamble for July arrival."

Market sources said that Chinese offer prices for cold-rolled sheet last August and September became so competitive that material was sold at a discount to domestic hot-rolled sheet (, Sept. 5), encouraging large-volume buys from U.S. consumers. But that buying window has since closed, sources confirmed, with the majority of the low-priced cold-rolled sheet ordered in the fall having already arrived at U.S. ports.

Chinese prices saw a run up in January and early February ahead of the Lunar New Year holiday, sources said, but at least one major Chinese mill has since decreased offer prices to the U.S. market on the back of lackluster demand, low bookings and softer U.S. prices.

Chinese cold-rolled sheet for April to May shipment and June to July delivery into East and Gulf coast ports is now priced around $720 per ton ($36 per hundredweight) f.o.b. port, sources said this week. Domestic cold-rolled sheet prices were still reported last week at around $710 to $720 per ton ($35.50 to $36 per cwt) in the Northeast and Midwest, however, making Chinese imports into those regions difficult.

"I don’t remember the last time that cold-rolled was sold in such low volumes into those (East and Gulf coast) regions," said a third trader. "Right now, things are a little upside down. The U.S. market is the cheapest market in the world."

But if a portion of the recent $50-per-ton ($2.50-per-cwt) domestic price hike on flat-rolled sheet products sticks, foreign cold-rolled sheet may once again begin to look more attractive, sources said (, March 4).

Meanwhile, West Coast deals continue to be more attractive due to shorter lead times, traders said.

About 29,000 tonnes of Chinese cold-rolled was set to hit U.S. shores last month, according to data from the Commerce Department’s Import Administration, double the 13,561 tonnes of Chinese cold-rolled imported in the same month last year and significantly above 9,773 tonnes in the first month of this year.

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