Final Thoughts

When looking at hot rolled coil prices U.S. buyers need to remain aware of what is going on with the rest of the world. Prices in Europe are rising and as one trader put it to us on Friday of this past week, “The Turks aren’t idiots.” Prices for HRC in the Turkish market are around $450 per metric ton and they certainly do not want to get caught selling steel to the U.S. at below their home selling prices. What does this mean to U.S. prices? My opinion is whatever erosion we have in HRC prices is coming from domestic competitive pressures and not from cheap foreign steel.

Cold rolled and coated steels are different than hot rolled in that the U.S. mills have this wider than normal spread between HR and CR, galvanized/Galvalume base pricing. My opinion is we will see a tightening of the spread, but it may not necessarily get back to the more normal $100-$120 per ton. Hitting the low price foreign country (Vietnam) may help keep the spread between HR and CR/coated elevated. At this moment it is too early to tell. We also have to wait and see if other foreign steels (like Brazil and Russia) will be offered in larger volumes.