US HRC: Prices flat, large deals get discounts

US hot rolled coil (HRC) prices were flat this week as mills jockey for position in a slow buying market.

The Argus weekly domestic US HRC Midwest and southern assessments were flat at $1,100/short ton (st). Prices were down by 8.3pc from their peak of $1,200/st in early April.

In the Midwest and South, there remained offers as high as $1,180/st, but most competitive offers were lower at $1,040-$1,160/st. A Midwest mill was offering at $1,100/st, noting that buyers are out of the spot market and staying on contract.

One large buyer said their June contract price is looking like it will be higher than spot pricing, and they already cut their May and June contract tons to their minimum volume commitments.

The stalled market is also weighing on lead times as mill orderbooks remain limited in mid-June. US HRC lead times shrunk to 4-5 weeks from 5-6 weeks previously, according to the latest Argus average data. Lead times are down from a peak of 8-10 weeks at the end of March.

Mills have been willing to negotiate on volume, with one Midwest mill offering a buyer $930/st for 3,000st for June. That buyer is currently buying on contract in the middle of their volume allotment.

A large spot purchaser said "the shelves are bare" as he works to mitigate his risk and stretch his inventory to avoid the spot market, adding that prices of $900/st are out there for HRC volumes of 10,000-15,000st.

A large Canadian buyer reported they were able to drop the price on 4,500st of HRC by C$80/st to bring the price to mid-C$60s/st ($48.25/st) per hundredweight with a Canadian mill, with import prices into Canada reported to be in the low-C$60s. He added that US mills have contacted him for quotes after being quiet for three to four months.

A southern mill was reported to offer HRC into Chicago at $1,110/st delivered, while a Canadian mill was offering at $1,060/st delivered.

Weaker overall spot prices have been priced into the CME US HRC forward curve as it fell from $5-35/st through the rest of the year.

Import prices were flat this week at $840/st on a ddp Houston basis based on offers from South Korea. Longer lead times of September continued to keep buyers at bay. Importers believe the have limited time to book vessels, for delivery this year, with a pause taking place in June and July before buying resumes later in the summer for 2024 deliveries.

Prices of $940-960/st from Egypt were reported.

Plate

The Argus weekly domestic US ex-works plate assessment was flat at $1,570/st, continuing to match published offer levels from integrated steelmaker Cleveland-Cliffs and electric arc furnace (EAF) steelmaker Nucor.

Lead times fell to 7-8 weeks from 6-9 weeks. A large service center said EAF platemaker SSAB is asking them to book their July contract tons, while Nucor has not yet opened their books for that month. Another buyer said Cleveland-Cliffs is almost fully booked for June.

Plate imports are reportedly into the fourth quarter and were reported available from South Korea and Brazil. South Korea was said to have already filled its quota volumes for the third quarter.

The Argus US delivered plate assessment fell by $40/st to $1,620/st as offers fell in a lower range of $1,600-1,640/st.