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Nov 09, 2024

US CR, import prices trend higher - Steel Market Update

International Steel Prices Written by David Schollaert November 8, 2024 Share on LinkedIn The price spread between US-produced cold-rolled (CR) coil and offshore products remained largely flat in the

International Steel Prices

Written by David Schollaert

November 8, 2024

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The price spread between US-produced cold-rolled (CR) coil and offshore products remained largely flat in the week ended Nov. 8, on a landed basis.

While domestic CR coil tags moved higher week on week (w/w), offshore prices were also mostly higher, edging the premium just marginally higher.

US CR coil prices averaged $930 per short ton (st) in our check of the market on Tuesday, Nov. 5, $10/st higher vs. the prior week. Despite a quick snapback after reaching a recent bottom in late July, price have fluctuated, keeping US tags just $30/st away from the market’s lowest level year to date. Prices are now roughly $395/st from a high of $1,325/st in January.

Domestic CR prices are, theoretically, 18.8% more expensive than imports. That’s up from 17.5% last week and still well removed from a 31.5% spread in early January.

In dollar-per-ton terms, US CR is now, on average, $140/st more expensive than offshore products (see Figure 1). That’s up $12/st from last week but is still well below a recent peak of $311/st in mid-January.

The charts below compare CR coil prices in the US, Germany, Italy, South Korea, and Japan. The left-hand side shows prices over the last two years. The right-hand side zooms in to highlight more recent trends.

This is how SMU calculates the theoretical spread between domestic CR prices (FOB domestic mills) and foreign CR prices (delivered to US ports): We compare SMU’s US CR weekly index to the CRU CR weekly indices for Germany, Italy, and East Asia (Japan and South Korea). This is only a theoretical calculation. Import costs can vary greatly, influencing the true market spread.

We add $90/st to all foreign prices as a rough means of accounting for freight costs, handling, and trader margin. This gives us an approximate CIF US ports price to compare to the SMU domestic CR price. Buyers should use our $90/st figure as a benchmark and adjust up or down based on their own shipping and handling costs. (Editor’s note: If you import steel and want to share your thoughts on these costs, please get in touch with the author at [email protected].)

As of Thursday, Nov. 7, the CRU Asian CR price was $544/st, unchanged w/w but ~$5/st lower than a month ago. Adding a 71% antidumping duty (Japan, theoretical) and $90/st in estimated import costs, the delivered price to the US is $1,021/st. The theoretical price of South Korean CR exports to the US is $634/st.

As noted above, the latest SMU CR price is $930/st on average, which puts US-produced CR theoretically $91/st below CR product imported from Japan but $296/st above CR imported from South Korea.

Italian CR prices were $654/st, up $7/st this week. After adding import costs, the price of Italian CR delivered to the US is, in theory, $744/st.

That means domestic CR is theoretically $186/st more expensive than CR coil imported from Italy. The spread is up $8/st from last week but still nearly ~$270/st below a recent high of $453/st mid-December.

CRU’s German CR price was up $7/st vs. the previous week. After adding import costs, the delivered price of German CR is, in theory, $760/st.

The result: Domestic CR is theoretically $170/st more expensive than CR imported from Germany. The spread is $8/st higher w/w but still well below a recent high of $428/st in the first week of 2024.

David Schollaert is a senior analyst for Steel Market Update. David joined SMU after more than a decade in the metals and mining industry in a myriad of different roles. Much of his early experience and expertise were within the coverage and analysis of steel-making raw materials and served previously as senior editor of the CRU Prices Service. Most recently, however, before his return to market analysis, David held roles as a metals buyer and an operations manager for raw material suppliers. Based in CRU’s Pittsburgh office, David can be reached at [email protected] or 724-720-1008.

China’s steel export volumes reached 11.2 million metric tons (mt) in October, the highest monthly level since September 2015. Steel export prices were mostly stable in China and India this week, while in Turkey steel export prices increased week over week (w/w).

US hot-rolled (HR) coil prices moved lower this past week while tags in offshore markets were largely higher. Domestic tags are again nearly level with imports on a landed basis.

The price spread between US-produced cold-rolled (CR) coil and offshore products was negligibly tighter in the week ended Oct. 25, on a landed basis.

US hot-rolled (HR) coil prices moved lower again this past week. A similar trend was seen in offshore markets, keeping domestic tags marginally above imports on a landed basis.