US HRC: Prices rise despite strike headwinds

Market: Metals
03/10/23

US hot-rolled coil (HRC) prices rose this week for the first time since July as mills booked higher sales in the wake of Cleveland-Cliffs' price increase announcement, even as the auto strike continued.

The Argus US HRC Midwest and southern assessments both increased by $30/st to $700/st ex-works.

The higher prices came as a mill reported making repeatable transactions of 100-500st at $700/st. Multiple buyers were offered that price for a few hundred tons of HRC.

Integrated steelmaker Cliffs and electric arc furnace (EAF) competitor Nucor were both said to be offering at $750/st.

Lead times jumped to 7.2 weeks from 5 weeks as mills were said to be booking into mid/late November. The longer lead times come after mills filled their books in recent weeks with lower-priced, large volume transactions that broadly took place below $650/st, according to market participants.

The uptick in pricing and Cliffs' pricing announcement last week caught many by surprise. Price increases were expected but only after the resolution of the current United Auto Workers (UAW) strike against the Big 3 US automakers, when auto-related steel demand is expected to pick up.

Downstream demand has not increased, with much of the longer lead times from service centers looking to restock their inventories with at least some material after running lean for most of the year. Service centers have been cautious to buy excess material as prices have been under pressure for most of the year.

While the UAW strike against Ford, General Motors and Stellantis expanded on Friday, the market still has not seen much direct impact to consumption. The deepening and lengthening of the strike — now in its third week — is causing growing concern among the market, as the longer the strike goes on for the higher the chance it will curtail steel consumption.

Currently five assembly plants that build midsize pickup trucks, SUVS and sedans are being struck, with a sixth idled because of a lack of parts. An additional 36 parts distribution centers are being struck across GM and Stellantis as well.

The HRC import ddp Houston assessment was flat at $680/st as Asian markets paused for holidays.

Plate

The Argus US plate assessment was flat at $1,470/st ex-works on limited trades.

Lead times fell to 5.5 weeks from six weeks as the market starts booking November tons.

Delivered plate pricing was flat at $1,510/st.

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