CRU: Chinese Prices Decline as Recent Run Comes to an End

By CRU Principal Analyst Josh Spoores

In the U.S. Midwest market, sheet prices have continued to decline on increased domestic, and now North American, supply. In addition to rising supply, falling scrap costs have also allowed EAF-based mills to remain competitive at these lower prices. It has now been one week since Canada and Mexico could export steel to the U.S. without the S232 tariff. This has worked to increase competition to place steel. Yet, consequently, buyers remain hesitant of initiating orders as they wait for lower prices. Plate prices in the U.S. have resumed their downward trend after steadying for a week. Prices here fell by $37 /s.ton as service centers continue to refrain from buying in order to work down inventory in this falling price environment. We continue to expect scrap prices to fall slightly further in June, which may add to this decline in plate prices.