US HRC: Prices plunge on falling demand
Domestic US hot-rolled coil (HRC) spot prices plunged this week as the steel market digested a slew of closures from automakers, parts manufacturers and steel mills due to the coronavirus pandemic in the US.
The Argus weekly domestic US HRC index fell by $40.50/short ton (st) to $539.50/st ex-works Midwest on seven indications from buy-side sources.
Lead times fell by a week to five weeks as no mills reported booking new orders.
Prices struck a wide range this week, with mills saying they saw no reason to chase business due to the fall off in demand and buyers reporting having multiple mills bidding prices down on an order.
Many market participants reported order cancellations and customers closing their businesses due to the shutdown of automakers in the US and the original equipment manufacturers (OEMs) that supply them.
One service center said orders worth thousands of tons had been canceled, and many market participants are still reviewing their orders and inventories to figure out what projects will be fulfilled.
Many expressed increased concern at what would come in May, when demand is expected to plummet. Earlier this week, President Donald Trump extended social distancing guidelines in the US through to 30 April.
April ferrous scrap prices are expected to fall between $30-$50/gross ton (gt), depending on quality and region. Deep uncertainty has gripped the scrap market, as many have shut down peddler flows as part of government orders and to protect their staff, and flows of prime material has dried up with the closures of auto plants.
Today automaker Ford became the latest in the US to extend its shutdowns. The company had originally planned to restart some US plants on 14 April, and it has delayed those plans indefinitely.
Fiat-Chrysler Automobiles (FCA) announced last week it was extending its shutdowns, as did Japanese automaker Toyota's US operations.
Last week integrated steelmaker Cleveland-Cliffs, which recently purchased AK Steel, and US Steel announced the closures of multiple blast furnaces. Cleveland-Cliffs idled the 2.2mn Dearborn Works in Detroit, which primarily served the auto industry, while US Steel announced the idling of its 1.5mn st/yr No 4 blast furnace at its Gary Works mill in Indiana. The blast furnace had been scheduled to be taken down for maintenance, but will be idled until market conditions improve.
US Steel also took down the more than 1mn st/yr blast furnace A at its Granite City works in southern Illinois. The idling may have been due to the previous decision by the steelmaker to idle its tubular mills, according to a market participant.
Including previous idlings by ArcelorMittal at its Indiana Harbor West mill, more than 5mn st/yr of flat-rolled steelmaking capacity in the US has been taken offline. ArcelorMittal also idled a blast furnace at its Dofasco mill in Canada.
Gerdau last week idled 1mn st/yr of melting operations at its special steel mills, as a result of the auto shutdowns.
HRC import prices into Houston dropped by $50/st to $580/st ddp as no domestic buyers picked up lower international offers.
After plunging in the prior week futures prices in the CME HRC futures market recovered somewhat over the last week, with May prices rising by $9/st to $495/st. June futures prices increased by $11/st to $485/st, while July prices rose by $11/st to $485/st. August prices increased by $18/st to $496/st, and September futures prices jumped by $30/st to $510/st. October HRC futures prices rose by $28/st to $518/st, while November prices settled up by $23/st to $518/st. December HRC prices are at $519/st.
Summary of market activity heard by Argus:
- HRC, US: Tradeable value at $534/st, ex-works Midwest, according to buyer
- HRC, US: Tradeable value at $577.50/st, ex-works Midwest, according to buyer
- HRC, US: Tradeable value at $560/st, ex-works Midwest, according to buyer
- HRC, US: Tradeable value at $500/st, ex-works Midwest, according to buyer
- HRC, US: Tradeable value at $550/st, ex-works Midwest, according to buyer
- HRC, US: Tradeable value at $525/st, ex-works Midwest, according to buyer
- HRC, US: Tradeable value at $530/st, ex-works Midwest, according to buyer
Related news posts
Vietnam’s Vinfast cuts EV sales goal, delays US plant
Vietnam’s Vinfast cuts EV sales goal, delays US plant
Singapore, 15 July (Argus) — Vietnam-based electric vehicle (EV) manufacturer Vinfast Auto has lowered its 2024 EV delivery goal and delayed its North Carolina EV plant's first production by three years, because of economic headwinds. "We have adopted a more prudent outlook that is carefully calibrated to near-term headwinds, taking into full consideration the realities of market volatility and potential challenges," said the chairwoman of Vinfast's board of directors Le Thi Thu Thuy on 12 June. Vinfast now expects to deliver 80,000 EVs in 2024, down from the 100,000 units it set earlier this year and having missed its delivery goal of 40,000-50,000 last year. Vinfast delivered 21,747 EVs in January-June, almost doubling on the year, according to the company. Its EV sales over April-June stood at 12,058 units, up by 24pc on the quarter and 26pc on the year. It started building a $2bn EV factory in US North Carolina's Chatham county last year, with output scheduled to begin in 2025 . But the firm has now made the "strategic decision" to push it back to 2028, Vinfast said. VinFast earlier this year said that it would invest $2bn in south India's Tamil Nadu state to develop its EV sector, including building an EV plant that can produce 150,000 units/yr. The plant will be "opened" in the first half of 2025, said Vingroup's chairman Pham Nhat Vuong last month, adding that India will be Vinfast's biggest Asia market. The global battery and EV sectors have been facing various economic and geopolitical headwinds. This includes persistently elevated interest rates that are curbing consumer spending, and rising geopolitical market barriers starting with the US and EU's tariffs on Chinese EVs, as well as Canada looking into potential punitive duties on Chinese EVs. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Germany's Aurubis copper smelter back from maintenance
Germany's Aurubis copper smelter back from maintenance
London, 12 July (Argus) — Germany's Aurubis today announced that its Hamburg copper smelter returned to service on 11 July from the largest maintenance shutdown in the company's history that began 7 May. A restart is now under way following the €95mn 60-day maintenance that included an overhaul of the flash smelter, installation of heat exchangers in the contact acid plant, as well as the installation of a tap hold drill and tamping machine for improved safety of copper slag tapping. Hydrogen-ready anode furnaces were also installed as measures to improve sustainability. Investments in automation are set to improve efficiency and extend the frequency of planned maintenance rounds to three years from two. The Hamburg smelter's outage has exacerbated sulphuric acid tightness in Europe , and the operational restart is expected to provide some relief to the market. This comes in addition to the lack of availability of molten sulphur in the region, leading to shortages of sulphur burnt acid , which has prompted some consumers to replace burnt acid with smelter acid, lifting demand. Aurubis produced 1.19mn t of sulphuric acid during the first six months of the 2023-24 financial year (October-March), up by 1pc on the same period a year earlier. Output at Aurubis' Hamburg smelter rose by 11pc to 512,000t in the period, while output from the Pirdop smelter saw a 6pc decline on the period to 679,000t . For the first three months of the year, Aurubis produced 598,000t of acid, unchanged from the same quarter of 2022-23, as increased output at its Hamburg smelter offset a decline from Bulgaria's Pirdop plant. Production at Hamburg totalled 258,000t from January-March. By Maria Mosquera Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s BHP to import sulphuric acid for Lynas
Australia’s BHP to import sulphuric acid for Lynas
Singapore, 12 July (Argus) — Australian resources firm BHP has "affirmed its commitment to using reasonable efforts" to supply imported acid to Australia-listed mining company Lynas Rare Earths, Lynas said today. This comes after BHP announced a temporary suspension of its Western Australia nickel business from October, citing bearish expectations against nickel prices. Lynas has a supply contract with BHP Nickel West for the provision of sulphuric acid from the Kalgoorlie nickel smelter or imported sources to its Kalgoorlie rare earths processing facility, with the initial term until 30 June 2027. By Deon Ngee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US, Mexico exempt Brazilian steel from new 232 tariffs
US, Mexico exempt Brazilian steel from new 232 tariffs
Sao Paulo, 11 July (Argus) — The US and Mexico will exempt Brazilian steel imported from Mexico from adjustments made to the US' section 232 tariffs. Steel imported from Brazil that is processed in Mexico then exported into the US will not be subject to tariffs, the Mexican external relations ministry said today, adding that "the melting and pouring requirements will not apply to products that come from [Brazil]." The US and Mexico jointly announced on Wednesday new import restrictions that will reinstate the 25pc and 10pc section 232 tariffs on some steel and aluminum imported from Mexico, requiring imported steel to be melted and poured in the US-Mexico-Canada free trade agreement (USMCA) region, while aluminum should not contain primary aluminum or be smelt or cast in Belarus, China, Iran or Russia. The new measures aimed at preventing Chinese steel from triangulating through Mexico, which both the administration and a bipartisan group of lawmakers have accused Mexico of allowing . The move is part of an effort from Mexico's government to avoid negative effects on the country's steelmaking sector, which is suffering because of a 50-day long strike at one of its key mills, ArcelorMittal's Lazaro Cardenas mill in the Michoacan state, that has cost the firm almost 500,000 metric tonnes (t) in lost production. Brazil is an important steel exporter to Mexico. In June, the South American country exported around 68,480t of slab to Mexico, more the double the amount from the same month in 2023, according to Brazil's ministry of development, industry and foreign trade data compiled by the Global Trade Tracker. Steelmakers that have greater exposure to selling products with less added value to units in Mexico to then be rolled there are the companies that tend to benefit the most from this situation, Genial Investimentos metals analyst Igor Guedes told Argus . By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more