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Sub-$700 HRC in the offing for US market, sources say - 28 February 2012

The recent trend of sagging US sheet pricing continues, as market sources say most spot hotrolled deals have inched closer to $700/short ton and below for bigger buys.

"I have heard of a couple of deals under $700 (for HRC), though I wouldn't say that is where the majority of prices are," a midwestern source tells Platts. "1,000 tons would likely get a buyer $700-$710 (per s.t) for HRC and $800-$810 for (coldrolled)."

That trend is mirrored by The Steel Index - a unit of Platts - which showed a $23/s.t week-on-week drop in its HRC price to $705. CRC also fell w-o-w by $7 to $820/s.t, while TSI's hot-dip galvanized price declined $10 to $856/s.t.

Industry analyst Chuck Bradford says in a recent report he's seen HRC prices continue to weaken, as well, but large buys are the ones getting prices well below $700. "Now, $680 a net ton is available for buyers of a minimum of 10,000 tons," Bradford says.

The downward trend comes as mill lead times have shortened and buyers are a bit spooked that prices could fall further in the coming weeks.

"The market is weakening, and I am sure prices will drop once more, if not twice more, in March," one US trader says.

A southern distributor says he's not personally seeing the slide, "but I think that it is happening.

"Buyers are nervous and lead times are still weak," he says. "Keep watching China. I think the dream economy is starting to end."


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