Steel products prices in the USA have been increasing, at least, since December 2009. At that, unlike other regions, in the USA the growth happens without the booms and intermediate falls. Totally in four months the prices of both flat and long products in the country increased by about USD 200 to USD 220 per tonne.
In the end of March 2010, the quotations for HRC in the US spot market reached USD 750 to USD 770 per tonne EXW, and rebar was offered at USD 680 to USD 690 per tonne EXW. Besides, the manufacturers offered CRC at USD 860 to USD 880 per tonne EXW. Basic prices for galvanized steel increased to this level as well. The price for plate A36 exceeded USD 900 per ton EXW.
In the second half of April 2010, many analysts noticed that the increase in the US steel market gradually faded away. Flat steel started to decrease. It was the most visible in HRC and plate markets. The terms of the shipments from a mill, which took more than a month before, decreased to two three weeks. The gaps between the prices, officially announced by the manufacturers, and the real contracts, appeared. All this showed that the stockpiles recovery is almost finished and real increase of the demand occurred to be insufficient.
Long products prices in the second half of March stopped to increase. The US construction industry is still in depression and no changes for the better are expected here till next year. In February 2010 and early March the buyers were active expecting the spring rally, but it turned to be lower then expected. However, in late March the market somewhat activated. The prices for flat steel in the last week of March increased by about USD 20 per tonne and reached the level mentioned above. According to the specialists, the increase will continue in April.
The reason of this increase is, as everywhere, the raw materials factor. The largest US metallurgical companies are better supplied with their own raw materials than the majority of their peers in Europe and East Asia. In general, in terms of iron ore and coking coal the USA is the exporter, but raw materials prices boost in global market affected the situation in North America. Besides, scrap prices increase by USD 30 to USD 50 is expected in April, which is more important for the US companies. According to the experts the shortage in the US and global scrap markets can last till June.
The increase in the US raw materials market was supported by the improvement of the general economy situation in the country. In March the number of jobs increased more than in any other month. Caterpillar company, in particular, resumed the employees hiring and announced that the economy started growing again.
Steel output in the USA also continues to increase. By the end of March the level of the capacities load in metallurgy reached 71.7% and the output volume in the tree months was up 60.4% on similar period of 2009. At that in the nearest future the return of the melting and rolling capacities of such companies as US Steel and Severstal USA is expected. However, the US analysts do not still see the treat of the overproduction, saying that the growth is at the flat steel market, which is in demand.
As earlier, The US companies feel the minimal competition from the foreign manufacturers. As per the preliminary customs data, in Apr. steel products import amounted about USD 1.3 billion which was by 25% less than in the similar period of 2009 and by 45% less than in February 2008. The supplies of the most demanded products go to Canada and Mexico. Taking into account the expenses for shipments and customs clearing, imported rolled steel is not competitive in the USA. For example, in late March Russian CRC were offered in the US ports at USD 880 to USD 900 per tonne FOT with the tax paid.