US HRC: Prices rise, buyers skeptical

Market: Metals
31/08/21

US hot-rolled coil (HRC) pricing continued to rise this week as mills continued to push prices higher amid a limited spot market.

The Argus weekly domestic US HRC Midwest assessment increased by $30/st to $1,960/st ex-works. Lead times were flat at 5-10 weeks.

The Argus weekly domestic US HRC south assessment increased by $20/st to $1,940/st.

One steelmaker continued to report sales of HRC between $1,900-1,950/st, with more being toward the high end, with Midwest HRC offers between $1,900-2,000/st.

A growing chorus of service center contacts believe the market is at or near peak pricing, with many reporting that customers are resisting current price levels.

A similar instance played out in late-January into February when customers walked away from the market's elevated pricing for a few weeks, causing prices to plateau and shrink minimally before continuing to rise.

Since the beginning of the year, US HRC prices have increased by 96pc and are more than four times higher than the low of $450/st recorded in August 2020.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices increased by 2.2pc to $1,386/st from $1,356/st.

The spread is more than six times higher than a year ago, when it was $238/st.

The Argus weekly domestic US cold-rolled coil (CRC) assessment increased by $25/st to $2,225/st. The hot-dipped galvanized (HDG) assessment rose by $20/st to $2,180/st.

Lead times for CRC and HDG both expanded to 8-11 weeks from 10-12 weeks.

The CME HRC Midwest futures market moved up across the board by double digits through the next four months, though the market remained in backwardation. October pricing rose by $47/st to $1,875/st, while November pricing jumped by $75/st to $1,785/st. December futures increased by $72/st to $1,695/st, while January futures pricing rose by $58/st to $1,640/st. February pricing was flat at $1,605/st.

HRC import prices into Houston dropped by $100/st to $1,600/st ddp. The price fall came on dueling price offers, with Vietnam offering HRC into Houston at $1,400/st ddp and Turkish numbers above $1,700/st ddp.

Plate

The Argus weekly domestic US plate assessment rose by $20/st to $1,720/st delivered after electric arc furnace (EAF) platemakers Evraz and SSAB last week followed the price increase by Nucor. Lead times shrank to 6-9 weeks from 7-10 weeks.

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