Hot-rolled imports halt as cold-rolled flows in

NEW YORK — Traders selling foreign hot-rolled steel into the U.S. market are hoping that the recent price increases by U.S. mills, coupled with domestic labor issues and outages, will revive the lackluster importing sector.

But with buyers continuing to cite long import lead times, with delivery into the fall, and little incentive to buy foreign when domestic prices are hovering around the $600-per-ton mark, import business has nonetheless continued to be difficult.

"For us flat-rolled traders, we’re all dead in the water. The importing business has been so dull lately; there’s just no zip," one trader said. "If hot-rolled gets tighter and prices climb, maybe there will be a glimmer of hope."

Offers for imported hot-rolled coil have been almost nonexistent in the U.S. market due to lower-priced domestic product, traders said, adding that with Russian hot-rolled effectively out of the market due to the suspension agreement, few options remain in the spot market.

"I haven’t booked a pound of hot-rolled in a long time," a second trader said.

The small amount of business concluded this week for hot-rolled coil into the Port of Houston was reported at between $560 and $600 per ton c.i.f. compared with domestic prices around $590 per ton f.o.b. Midwest mill.

But if domestic prices continue to rise, traders say it’s possible imported sheet could again gain some traction.

Last month, Pittsburgh-based U.S. Steel Corp. raised spot prices on all flat-rolled steel products by a minimum of $50 per ton, a move mirrored by a number of other mills (, May 23). While it’s too early to tell to what degree the recent increases will hold, buyers told AMM that mills are starting to hold the line on the newer prices.

"We’re hoping the price increase recently will help stabilize the market. There’s some indication that things are moving a little," a third trader said. "But at the same time, there’s still too much production."

A number of steel traders confirmed that on top of the lack of Russian sheet availability, Brazilian product also has been "out of the U.S. market" for some time.

"Brazil hasn’t been an option for four months now. They don’t like the pricing here," a fourth trader said.

Cold-rolled offers, however, seem to have been more competitive recently, particularly as Chinese mills and traders have again started to offer low-priced deals mirroring those reported last fall (, Sept. 5). Sources reported cold-rolled coil transactions at $650 to $660 per ton into the Port of Houston for September and October delivery, lower than domestic prices around $690 per ton f.o.b. Midwest mill.

"Chinese prices are where they were last October when the market bottomed," the fourth trader said. "That’s because Chinese internal demand isn’t growing at any measurable pace. There’s no other place to sell steel than here. Europe is no longer a good market, and we’re the market of choice."

Others noted, however, that Chinese product has been much more competitive on the West Coast than on the East or Gulf coasts due to shorter lead times.

"We’re seeing plenty of buying activity, but pricing is as tough as can be," a fifth trader said. "Cold-rolled is definitely attractive, but people are not rushing to place huge orders."

But looking into the summer, traders say something fundamental will need to change before import business will see a meaningful pickup.

"(Domestic) lead times are short, and I suppose it’ll be a leap of faith that this recent price increase will stick. Something’s gotta give," the second trader said.

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