US flat-rolled steel prices continued to hold Thursday as buyers reported seeing limited quotes for spot purchases.
The daily Platts TSI US HRC assessment was calculated at $852.50/st Thursday, unchanged on day, while the daily Platts TSI US CRC assessment was calculated at $971/st, up $2.25 from Wednesday.
A service center source said he was seeing current spot HRC pricing at $840-$850/st, however he said he was expecting mills to open May order books at $900/st. "I think it may take a few weeks to a month to get the market to $900/st, but I do think there will be some staying power," he said. "With the tariffs, at $900/st or less domestic mills should still be able to dominate the market."
US President Donald Trump last week signed off on a 25% tariff on steel imports to take effect March 23. While the White House had previously discussed a blanket tariff that would cover all countries, when the tariff orders were signed it was announced that Canada and Mexico will be exempt from the tariffs initially. Trump on Friday tweeted that the US is also working with Australia to reach a deal for its exclusion and other countries are also working to secure exclusions, which continues to leave an air of uncertainty in the market, sources said.
"A few weeks back this tariff seemed to have more teeth with Trump saying there would be no exclusions, it would apply to everyone 100% across the board and I think more people were of the mindset that it was going to last a while, or at least until the end of the year," a second service center source said. "With the exemptions and the possibility that more countries may be excluded, that may weaken the effect."
He said he was seeing spot HRC pricing at $850/st this week, but has had some trouble getting his customers to accept the higher pricing. A third service center source said he sees the HRC market trending toward $900/st, but was unsure how much additional upside potential there would be.
"The numbers just keep going up, but it can't stay that way," he said.
The impending import tariffs have helped to stir up business from end-users and other customers, however some business is being lost due to the higher spot market pricing, the third service center source said.
"We're trying to quote off our replacement costs and we are losing out on some business as a result," he said.
With strong lead times and demand, US mills are not in a place where they have to negotiate on pricing, buyers said.
"Even if the tariffs are ripped up and thrown out, it's still going to take three to four months to get any imports here," the second service center source said. "I think the domestic mills will be in control for quite a while."
Buyers said they have not seen any import offers this week as traders are still feeling out how to operate once the US' import tariffs take effect. "There's some talk about bringing in imports, but nobody is really making a move until there is more clarity on the tariff exemptions," the third service center source said.
In addition to country-specific exemptions, US parties will be able to request product-specific exemptions. Additionally, if the US removes the tariff on imports from one country it will then raise the rate for those that are still under the tariff, the White House has said.
"If I were a trader doing business with a country that may not get an exclusion I would be apprehensive about using that 25%," the second service center source said. "There's still a lot of unknowns."
The combined Platts TSI price index uses a volume-weighted average calculation - according to TSI's standard - to determine value on an ex-works Indiana basis.
