Analyst indicated that the US’s prices of hot rolled coil (HRC) would probably drop to the marginal costs in the third quarter of this year.

Currently, the production costs of HRC in the US’s small scale steel mills stand at US$662~US$689/ton and that in large steel enterprises is at US$717~US$772/ton, in comparison of the HRC spot prices of US$772~US$794/ton in the US market.

In fact, steel mills used to reduce the production once the steel prices were close to the marginal costs in the past years; however, the new production capacity has been increasing this year.

Facing 9.5 million tons of new capacity production this year, the US’s steel mills have been suffering from the huge pressure of production reduction.

Meanwhile, according to the survey, most steel distributors in the US predicted that the prices of steel sheet would drop further in the third quarter of this year and they’ve planned to reduce the stocks.