March Steel Market Insights: Trends and Turmoil

Written by Philip Hoffman

As I see it, the market looked to be a perfect storm for consumers this month while two large steel mills tried to put a floor on HRC. One source speculated that “flat rolled mills coordinated their downtime and will take out 250,000 tons of capacity in April,” which made them attempt to put a bottom on flat rolled product.

In the Rocky Mountain region, it turns out the mill that significantly reduced their buying program in February did come back into the market in March, albeit at about 50% of their normal program. They intend to return to their full purchase program in April, which may help put a floor on the Texas/Gulf region for the month.

However, that didn’t stop the Texas/Gulf markets from coming down significantly in line with the rest of the U.S. in March. Several sources confirmed local Texas mills were down on HMS, shred/PNS and busheling– $40, $50 and $60, respectively– making HMS at $360 – 365, shred/PNS at $390 – $395, and busheling at $390 – $400. One mill does have to pay $410 – $415 for busheling as they are a relatively long way from the Houston area.

On a related note, one bulk sale to Turkey did come out of Texas at $376 for HMS and $396 for bonus/PNS, which seems to be the lowest U.S. bulk sale to date. Houston dock prices moved accordingly and seem to be at the $290 level for HMS.

On the U.S. West Coast one major Taiwanese mill was confirmed to bid $348 CFR for containerized HMS but no deals were executed at that price. West Coast suppliers are getting offers at $340 – $345 FAS, which is $352 – 357 CFR. Vietnam is still waiting because of lowered billet and longs prices in Vietnam due to slack demand and Chinese imports. However, the Vietnamese government did institute a stimulus package which could boost steel demand as early as April. In addition, the Yen stands at 147, which seems to be stable. Given the resistance to $348 and the value of the Yen, we could also be looking at a bottom for exporters to Asia.

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