The full range of hot-rolled steel coil prices in the US market may be widening, as buyers continue to see lower deals possible, market sources said Friday.
With limited spot transactions reported, S&P Global Platts held its daily HRC and cold-rolled coil prices unchanged Friday at $580-$600/st and $790-$810/st, respectively. Both assessments are normalized to an ex-works Midwest (Indiana) basis.
"It is muddy out there; $560-$570 seems to be becoming the market [for HRC]. Most mills would admit they think we are heading to $550, but they are optimistic they can start to hold a line. Not sure why, but they are really hanging onto the outages," one service center source said.
He said he has not purchased in the $560-$570/st range yet and is avoiding placing orders to see how the market develops.
A mill source said he is not surprised that people have said $560/st, but he expects there is freight equalization or other factors clouding peoples' view of achievable market prices. "The mills, the individual sales people have to ask the questions to make sure you're comparing apples to apples," he said.
The mill source said he is not selling HRC below $600/st and CRC is steady in the $800-$820/st range.
Market sources have speculated about a possible price increase announcement after the Labor Day holiday September 5. The service center source said the market fundamentals are not there to support a price increase.
"Supply and demand should be able to rule the price game," the mill source said. "You can't artificially create demand by lowering your price, and you can't artificially create demand by raising it either."
A trader said a lot of his customers are waiting to book imported material until after Labor Day to see the direction of the market and to see if demand picks up. "The economy is OK, but it seems like demand is not there. It's very puzzling talking to a number of people and everyone is wondering if it's a seasonal slowdown," he said.
Even Turkish mills have pulled back on offers for CRC, he said, expecting they will try to raise prices soon to keep up with increased costs.
