US HRC: Prices continue to rise

Market: Metals
27/10/20

US hot-rolled coil (HRC) spot prices continued to increase this week as spot steel availability shrank and mills pushed for higher prices.

The Argus weekly domestic US HRC assessment rose by $10/short ton (st) to $685/st ex-works Midwest, the highest price level since April 2019. The HRC assessment has increased by 52pc since mid-August, when prices were at a yearly low of $450/st.

Lead times stayed steady at 8-10 weeks, with spot availability for December said to be minimal.

Steel Dynamics (SDI) was said to still be holding out on opening order books for December. Integrated mills have little capacity to offer for the rest of the year.

JSW Steel USA chief executive Mark Bush, who joined the company in August, told Argusthat the company expects its Mingo Junction, Ohio, electric arc furnace (EAF) to be up and running by the end of the first quarter. The 1.5mn metric ton (t)/yr EAF has been idled since July as the company works to replace the EAF.

Ohio-based North Star BlueScope will have a one week planned outage in the first week of November. Arkansas-based EAF steelmaker Big River Steel will start rolling steel from its new 1.65mn st/yr expansion in November.

Integrated steelmaker US Steel announced on 26 October that it had successfully melted and poured its first batch of steel from its new 1.6mn st/yr EAF at its Fairfield, Alabama, tubular mill on 20 October.

Canadian integrated steelmaker Stelco reported a cyberattack on its mill on 25 October that temporarily took down its 2.64mn st/yr blast furnace. The mill has sicne resumed operations, but the company is working to assess and mitigate issues from the cyberattack.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices was $421.61/st, up by 2.4pc compared to the prior week. The spread is 43pc higher than the $294.07/st recorded a year ago.

US ferrous scrap market participants expect prices in the November scrap trade to be sideways to up $10/gross ton (gt), after being mostly flat in October.

The domestic US cold-rolled coil (CRC) assessment increased by $15/st to $875/st, while the hot-dipped galvanized (HDG) coil assessment increased by $10/st to $890/st. Lead times for CRC were flat at 11-12 weeks, while HDG lead times were flat at 12 weeks.

HRC import prices into Houston rose were flat at $680/st ddp, though long lead times and uncertainty of where the market will head in that time appear to be keeping imports at bay.

Near term futures prices in the CME HRC futures market continued to rise this week, adding to increases from the prior two weeks. December prices rose by $21/st to $681/st, while January HRC futures jumped by $26/st to $662/st. February prices increased by $19/st to $640/st, and March prices rose by $15/st to $616/st. April prices were up by $4/st to $605/st, while May futures prices slipped by $2/st to $596/st.

Plate

The Argus weekly domestic US plate assessment was flat at $640/st and lead times stayed at 4-6 weeks.

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