With declining demand, fast-falling prices and short lead times at domestic steel mills, along with already existing tariffs and quotas on imports, foreign mills interested in the US market face a dilemma: whether or not to lower their prices to match the US level, sources said.
If the answer is yes, how low would the price of foreign products have to be in order to attract buyers?
That has been an extremely difficult question to answer for market participants given the unprecedentedly challenging business environment created by the Covid-19 pandemic.
Case in point: the prices for hot-rolled coil in the US have fallen as low as $24.38 per hundredweight ($487.60 per short ton) in recent weeks, down by 21.1% from a year-to-date high of $30.91 per cwt in mid-January, according to Fastmarkets' HRC index pricing records.
In addition, the US HRC futures market indicated that prices could continue to slip to around $470 per short ton in the coming weeks.
Considering the at-least-three-month delivery time of overseas material, it is hard for imported steel sellers to decide what...