US HRC: Mills look to capitalize on momentum

Market: Metals
31/10/23

US hot-rolled coil (HRC) prices rose for the third week as mills force offers higher on the back of tight supply and news of tentative resolutions between automakers and the union.

The Argus US HRC Midwest and southern assessments rose by $50/short ton (st) to $850/st ex-works from the prior week and are now up by $190/st from September lows. Prices remain 29pc lower than 2023 peak of $1,200/st in April.

US Steel and Cleveland-Cliffs have moved new target prices up to $900/st with announcements this week. While new spot buying activity remained thin market participants indicated almost all minimum offer prices were at or approaching the $900/st level. The surge in spot offers was juxtaposed by the lower priced steel set to make its way to service centers' inventory following a more competitive spot buying environment in September. One service center remarked now their focus was getting their selling prices higher as some of their cheapest material hits inventory levels in November. "There's always a lag, mills push prices higher and our incoming is falling," the source said.

A mill source indicate recent sales for more than 100st had been at $850/st but new offers had been moved to $900/st. The sales had helped close out their December availability which lent support to higher offers. The tentative agreements between the United Auto Workers (UAW) and the Big 3 automakers Ford, General Motors (GM) and Stellantis resulted in a pickup in demand from previously on-strike facilities, added the source.

The UAW still needs its membership to vote on the approval of the agreements.

Buy-side sources indicated supply availability was limited through the remainder of the year. The Argus weekly assessed lead times increased to 8.5 weeks from eight weeks previously with most reported lead times in late December or inching into January 2024.

On the back the surge in domestic pricing, buying interest on import options started to increase. A trader noted customers were "coming out of the woodwork" looking for different opportunities. However, the spike in US domestic prices was leading to higher offers in the import market. The Argus HRC import assessment increased by $30/st to $740/st ddp Houston on transactions from Brazil, while offers out of Vietnam and South Korea also moved higher.

Plate

The Argus US plate assessment dropped by $45/st to $1,360/st ex-works as mill offers fell. Nucor dropped its ex-works offer price by $140/st on Monday to $1,390/st, an unsurprising move to buyers in the market, who have said Nucor has remained above market levels for many months. Repeatable offers were reported between $1,330-1,400/st. Demand remains slow, with multiple plate service centers pointing to delayed or cancelled wind farm projects as negatives in the market, with shipbuilding pointed to as one of the few strong downstream markets. Lead times rose to 5.5 weeks from 4 weeks as mills pushed solidly into December. Meanwhile some said November tons could be available, none had attempted to buy them. Delivered plate pricing fell by $45/st in line with ex-works prices to $1,393/st.

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