The bottom end of the Platts hot-rolled coil range dipped down $5/st on Thursday as more buyers were seeing offers and buying at $640/st in the Midwest market, however, small volume transactions may have found a temporary floor, sources said.
The Platts daily HRC assessment slipped to $640-655/st, from $645-655/st, with some still seeing prices at or slightly above $650/st. However, cold-rolled coil maintained its price range of $770-780/st. All prices normalized to a Midwest (Indiana), ex-works basis.
"I would say the [HRC] market is $640-650/st," a Midwest service center source said. "Some may ask for more depending on the region, but $650/st is a fair number."
He agreed $640/st HRC was available from some of the smaller Midwest producers but not from everyone. "The problem is distributors ... are talking down the market. There are not a lot of transactions going on," which is causing a "swarming" in the market "to find the cheap number, so people start thinking it is or should be out there."
A buy-side source noted that $650/st is probably the "higher side" of the HRC market "and what is being offered at this point."
He admitted he had not much contact with a major integrated producer lately and they may be offering higher, however, said that lead times were starting to get a bit shorter.
The buy-side source added that "$640/st [HRC] is pretty easy to achieve, and we believe there are larger buys available for a bit less," but said they have not gone "down that path as of yet."
A top-tier producer said he had heard talk of $640/st HRC, but did not know of anyone actually transacting at those numbers, either within the Platts specifications or not.
"I agree that spot buying is slow right now, but there is still a good book of contract business supporting overall order books," he said. The producer maintained it was currently transacting small HRC volumes in the $650-660/st range.
A trader accepted both the low and high ends of the HRC price ranges as being out in the market. He said the high end of the top-tier producer's range was likely for buyers' "walk-up price." However, he said there "are good deals out there for big commitments and it is not earth-shattering cheap, but closer to sub-$640/st."
"There is stability right now. There has been some backsliding on deals, but it does seem that those are drying up," he said. "The whole market has a wait- and see-attitude."
Source: Platts
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