Rusmet.ru, Victor Tarnavskiy/ The US metallurgical companies continue to increase flat steel prices. In mid-Feb. AK Steel announced the quotations increase for all kinds of carbon steel and flat steel by $50 per short ton ($55 per Mt). Earlier US Steel и Nucor provided the decrease as well, but to a smaller extent.
Thus, new prices for HRC from the leader US companies exceed $705 per Mt EXW. In spot market the prices for HRC in mid-Feb. amounted about $670-695 per ton EXW, and CRC were quoted at $785-805 per ton EXW. Basic prices for galvanized steel from US Steel reached $860 per ton EXW. According to traders not all consumers accepted new quotation, however, there are no cheap products in the market today.
Many US analysts say that the increase is to finish soon. According to them, the demand has stabilized, although at insufficient level and is likely to go down shortly. A the same time steel output in the USA continuous to increase. American Iron & Steel Institute (AISI) say that in the period from Feb. 6 to Feb. 13 the national metallurgical capacities load amounted as much as 68%, and steel output in 1.5 months of 2010 is up 53.5 % on the same period of 2009. Nevertheless it is too early to say that the US market is getting full. According to «Metals Service Center Institute» (MSCI) steel products stockpiles at the US steel service centers in the end of Jan. were only by 1.2 % more than a month ago and were the equivalent to 2.4 months of the consumption. This figure is rather low. Recently the plate market only is exhausted. This market seems to be oversold, whereas the demand for HRC and CRC remains stably high, first of all, from pipe rolling and automotive industries.
The situation in the US economy does not look excellent . The termination of some stimulating programs causes the specialists’ questions and concerns. However, these doubts of the market participants paradoxically positively affect the national steel producers. Firstly, there is no significant stockpiling which can cause the market oversupply and the fall. Secondly, the US traders do not want to deal with import due to long shipment terms, which is the significant disadvantage in the unstable market situation. In mid-Feb. Mexican products only in south states could compete with the US HRC manufacturers. At the same time Chinese CR steel, which was offered at $750-770 per ton CFR FO in early Feb., jumped to $850 per ton CFR FO and more.
By all appearances, the US flat steel manufacturers will manage to gain another increase of the prices in March explaining it by the raw materials (iron ore, coal, and scrap) prices growth. And only the ”second crisis wave” in the US economy or cheap import supplies increase will be able to turn the prices back. However, it is more possible that high prices in the USA will become the reason for the producers from other countries, who intend to increase the prices again in the Q2.
At the same time the stabilization happened in the US long products market. Rebar prices kept $575-585 per ton EXW since the end of Jan. Nucor company has not increase the section steel and beam quotations again. Wire rod manufacturers count on somewhat increase of their products prices in March. However, according to specialists there are few chances for it, except for scrap prices boost. The situation in the US construction industry remains depressive. Although in municipal construction there is some improvement, the investments to the infrastructure and commercial buildings remain very low. According to many experts, the gap between HR and rebar prices in the USA will grow with time due to the long products market stagnation against moderate growth of flat steel prices.