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Prices for imported cold rolled coil have edged down again in the USA amid intensified chatter of potentially imminent cold rolled and corrosion-resistant trade cases.
Petitions are likely to be filed by the end of May or early June, at the latest, market participants said.
“Months’ end is the latest, greatest rumour for a dumping case,” one trader said, noting that legal counsel for a Chinese mill had indicated a case was expected by June 1.
Renewed talk of imminent trade cases come as at least one large trading house was said to have stopped offering Chinese CRC. Others were reported to be shipping only limited quantities to the Gulf Coast and instead focusing on the West Coast, where shorter transit times from Asia reduce the risk of material not clearing customs before potential duties are imposed.
“You now have a low-return business with high risks if the music stops,” the trader said, noting that offshore cold rolled margins were now less than half what they were a year ago.
While offshore hot band prices to Houston docks have edged up to $400-430 per ton from $390-420 per ton previously, prices for imported CRC have fallen to $480-500 per ton from $500-540 per ton. Prices for CRC from abroad stood at $660-680 per ton a year ago, according to Steel First sister publication AMM’s price archives.
The higher hot rolled coil prices coincide with reports that some mills are aiming to increase prices while others were said to be cutting deals in an effort to entice US buyers concerned about a potential second wave of domestic prices increases, market participants said. Decreased cold rolled prices were attributed to lower Chinese offers, which are said to be pushing cold rolled suppliers elsewhere to trim prices as well.
The exact scope and timing of the trade case or cases remains a matter of debate, industry sources said. Any cases, if filed, are expected to target the “Big Four” producers, namely China, Taiwan, India and South Korea, they said.
The cases could be aimed at cold rolled and hot dipped galvanized flat-rolled steel, as well as painted and Galvalume material, trader sources said. While Galvalume is a smaller market than cold rolled and galvanized, it has seen more import penetration, they said, adding that while some domestic mills don’t make Galvalume, it is key to the growth strategy of others.
Besides having a broader scope than expected in terms of product, any cases could also include nations that weren’t previously seen as likely targets, such as Brazil and Italy, the trader sources said.
Still, some traders said they were wary about the latest rumour. “Each morning, I open the paper and I hope to read that a case has been filed,” a second trader said. “Everyone wants it – traders, service centres, end-users – because the uncertainty makes the market unstable.”
Shipments might have to be expedited ahead of any filing, for example, and there are questions regarding how “market claims” – essentially consumers refusing to accept orders or demanding compensation for minor damage done to material in the routine course of ocean shipment – might be handled, trader sources said.
Domestic mills typically issue checks to pay for any such claims, but Asian mills often adjust claims against future orders, market sources said. If there are no future orders because of a trade case, trading companies could be forced to absorb the claims, they added.
This report was first published by American Metal Market editorial@metalbulletin.com