US HRC: Prices up, mills push further

Spanish Market: Metals
07/03/23

US domestic hot rolled coil (HRC) spot prices increased for the fifth consecutive week as mills continued to push spot market offers higher, while price increases late last week continue to be digested by the market.

The Argus weekly domestic US HRC Midwest and southern assessments both increased by $100/st to $1,100/st, the highest levels since mid-June 2022.

Multiple steel mills reported selling HRC at $1,100/st since the last assessment. The price offer range was $1,000-1,200/st, with most in the $1,100-1,200/st range.

The $1,100/st base price was initially set by integrated steelmaker Cleveland-Cliffs on 27 February, and was reported to have been received by multiple steelmakers. Electric arc furnace (EAF) competitor Nucor followed on 3 March with a $150/st price increase, setting its minimum HRC price to $1,150/st. EAF steelmaker and reroller NLMK USA pushed its minimum HRC price to $1,200/st, with a 40-day outage at its Portage, Indiana, mill driving the move.

One steelmaker told Argus that they are booking slightly more than their production capacity, indicating they may have late deliveries through May.

HRC lead times in the Midwest rose to eight weeks from 6-8 weeks, with most mills said to be full or almost full for April. More mills have become booked into May and some are reportedly holding off booking more.

Steel mills have continued to be successful in receiving higher flat steel spot offers after formally raising prices by $460-510/st through a series of increases since the end of November through 21 February. The Argus US Midwest and south spot assessments have increased by $473/st since then, an increase of 75pc over the low point in November.

The price increases are being driven by a combination of smaller factors, with steel mill utilization rates below 75pc since mid-October, less supply from Canada and Mexico, tight service center inventories, a stronger-than-expected US economy and elevated raw material prices have put pressure on finished steel prices.

Contract discounts of 5-9pc to the current Argus HRC assessment would be the equivalent of $55-99/st.

The spread between #1 busheling scrap delivered US Midwest mills and HRC jumped by 17pc from the prior week to $700/st and is at the highest level since 24 May 2022. The spread is poised to contract once the March domestic ferrous scrap trade finalizes, but busheling prices are widely expected to not keep pace with monthly HRC price gains.

The Argus HRC import assessment into Houston fell by $25/st to $860/st. One buyer reported paying that price for a couple barges of HRC out of South Korea into the US Gulf Coast for July delivery. The transaction is outside of Argus' methodology but is a strong indicator of where the import market is. For countries subject to the 25pc Section 232 tariffs prices were reported between $900-1,040/st. Long lead times from non-North American countries and elevated prices continue to keep most imports at bay for now.

The Argus weekly domestic US cold rolled coil (CRC) assessment was flat at $1,200/st, while the hot dipped galvanized (HDG) coil assessment jumped by $100/st to $1,200/st.

NLMK USA increased its CRC and HDG offer prices to a range of $1,300-1,400/st last week, while buyers in the market has noted that HRC prices have increased so rapidly that its been hard to track where value-add prices have risen.

Lead times for CRC slipped to 9-10 weeks from 10 weeks while HDG lead times were flat at 8-9 weeks.

The CME HRC Midwest futures market jumped in the last week albeit at a slower rate than the prior week, pushing up by triple digits through June but with contango retreating a month through to July. April prices skyrocketed by $135/st to $1,270/st, while May prices also rose sharply by $118/st to $1,230/st. June futures prices jumped by $110/st to $1,198/st, while July prices rose by $81/st to $1,099/st. August futures increased by $27/st to $1,037/st, while September prices rose by $16/st to $1,010/st.

Plate

The Argus weekly domestic US ex-works plate assessment was flat at $1,480/st, the current target price for Nucor, while there were unconfirmed reports of higher ex-works prices from other suppliers such as SSAB Americas.

Lead times increased to 7-8 weeks from 6-7 weeks as more of April was reported to be booked.

The plate delivered assessment increased by $10/st to $1,600/st on higher reported delivered prices.

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27/12/24

Viewpoint: US stainless recovery expected in 1H

Houston, 27 December (Argus) — US finished and scrap stainless steel market participants are cautiously optimistic for 2025 because of low inventories, waning imports and expected policy changes when president-elect Donald Trump takes office in January. The stainless steel market expects a challenging early start to 2025 before a rebound later in the first half of the year, as renewed demand from the oil and natural gas sector combines with low inventories and potential Trump policies. US stainless meltshop production in the first half of 2024 totaled just over 1mn metric tonnes (t), up from the atypically low 2023 levels of roughly 940,000t, according to data from World Stainless. These figures are well below prior years with the US averaging about 1.18mn t in the first half of 2021 and 2022. The market has struggled to hit its full stride in 2024 as consistent finished imports and falling nickel prices undercut the market. Flat rolled coil ex works US prices for 304 declined to $1.60-1.77/lb for December shipments, compared with $1.68-1.86/lb a year earlier. Still, this trend could soon stabilize and begin to reverse. Sources estimate US service center finished stainless steel inventory levels for both flat rolled and long bar products are at lows last seen in 2021, a time when US demand was still crimped from the Covid-19 pandemic. Service centers have kept unusually low inventories because of a mix of moderate demand and higher-than-usual interest rates raising end-of-year accounting costs. Weaker service center demand has subsequently capped scrap generation, limiting how low US mills can push their raw material costs for new scrap. Average US stainless steel scrap 304 solids prices have held within a tight 2¢/lb spread of 56.5-58.5¢/lb since early August as falling generation rates ran up against lower demand. The incoming Republican administration has fostered an atmosphere of optimism among market sources, who expect Trump policies will support the domestic industry by cutting oil and gas permitting restrictions, shifting US spending away from overseas investments and broader deregulation of American businesses. Trump has also proposed a myriad of tariffs, including specifically targeting China and the US' largest trading partners — Canada and Mexico. US imports of flat rolled stainless of any size climbed by 22pc to 404,000t in 2024 so far, according to US customs data. Mexico contributed roughly 7pc of these volumes, while Indonesia — home to multiple Chinese stainless mills — contributed 8pc of US imports. By raising import costs, US producers could in theory make up some of this difference. Stainless producers will likely have to raise prices as a result of tariffs, following a year with far fewer base prices adjustments. Long producer Universal Stainless raised base prices only once in 2024 compared to five times in 2023. Nickel-scrap disconnect widens US mills have offset the persistent weak demand by tweaking the nickel payable — the percentage of the price of nickel they are willing to pay for nickel recovered from scrap — each month since April. The nickel payable rate reached a historic low of 42-43pc in 2023, before rebounding. Although up from historic lows, nickel payable has decreased from 57-59pc in March of this year to 50-54pc for procurements in November. At these lower levels scrap is more disconnected from the movements in the nickel market. Some market participants still remain concerned, chiefly over slowing growth in China, which consumes nearly 50pc of the world's nickel. China has ramped up production of nickel largely in Indonesia in recent years to service the growing electric vehicle market. Market conditions in Europe also continue to undercut demand. Spanish stainless producer and owner of US-based North American Stainless, Acerinox, highlighted in its third quarter results that the European manufacturing sector is undergoing a "drastic contraction". It added that while destocking efforts were completed at the time, demand remained weak. By Pete J Stavretis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Indian FeCr to face pressure in 1Q 2025

27/12/24

Viewpoint: Indian FeCr to face pressure in 1Q 2025

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Viewpoint: Real, tariffs to hit Brazil steel imports

26/12/24

Viewpoint: Real, tariffs to hit Brazil steel imports

Sao Paulo, 26 December (Argus) — Steel importers in Brazil are likely to face a tougher market in 2025 as government measures and the Brazilian real's depreciation to the US dollar make products from abroad less attractive. Brazilian steel importers are concerned that tariff-quota and antidumping policy changes made this year by the federal and state governments could raise costs for importing cargoes in 2025, likely exacerbating the impacts of a sharply depreciated Brazilian real relative to the dollar. The concerns come as US president-elect Donald Trump is already raising global trade tensions, with specific focus on Mexico, Canada and China, that could unleash waves of dueling trade measures. After seeing strong import growth in the post-Covid-19 recovery, Brazil steel importers are fretting they may lose momentum. Brazil's steel imports year-to-date November rose by nearly 24.4pc to 5.6mn metric tonnes (t) from the same period a year earlier. They are expected to end the full year 2024 up by 24pc, according to steel association Aco Brasil, after climbing by 50pc in 2023. Apparent consumption rose by 9.6pc to 24mn t in the 11 months through November, while production increased by just 5.6pc to 31.17mn t from a year earlier. Even with a 28pc depreciationof the real to the dollar in the 12 months through 24 December, prices for dollar-denominated steel imports still have a cost advantage over domestically produced steel. But that advantage is narrowing as the real weakens, with the price difference from imports over the domestic market narrowing to just $112/t in the latest assessment for hot-rolled coils (HRC) from $172/t in mid-October . "The dollar's [appreciation to the real] is messing up imports," one market participant told Argus , saying a wider price advantage for importers was necessary to offset issues like the exchange rate risk and the shipping time. Market participants also cited rising borrowing costs in Brazil as an additional challenge for imports, as many buyers rely on financing to purchase material from abroad. Brazil's central bank on 11 December unexpectedly hiked its target interest rate by a full percentage point to 12.25pc , citing the country's uncertain fiscal situation, accelerating inflation and challenging external conditions. Importers recently expressed concerns over Santa Catarina state's decision to no longer grant tax incentives for imports of six different steel and iron products for commercialization or resale in 2025. Although the timeline for implementing the measure was postponed to July and could face changes, importers remain concerned and are monitoring any possible reviews of the decision, sources told Argus . Santa Catarina's main port, Sao Francisco do Sul, accounted for over one-third of every steel product that is imported to Brazil from January to September, according to data from the country's distributors association, INDA, published in September. On the federal front, the government is likely to announce new and renewed antidumping measures for products coming mainly from China, Brazil's largest steel supplier. Another obstacle for importers would be a possible review of the tariff system for steel imports, which was implemented in June 2024 and led to additional tariffs of up to 25pc. The measure proved mostly ineffective at curbing imports into Brazil, and the industry group Aco Brasil said it would ask for adjustments . Despite the challenges, there is still room for importers to bring material to Brazil , as the country lacks steel to supply its domestic demand, another market participant said. "Brazil will always need imports because it still lacks some key home-made products to feed its market," the participant said. By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

China's GFEX launches polysilicon futures contracts

26/12/24

China's GFEX launches polysilicon futures contracts

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Japan’s crude steel output to recover in FY2025: IEEJ

26/12/24

Japan’s crude steel output to recover in FY2025: IEEJ

Tokyo, 26 December (Argus) — Japan's crude steel output is expected to recover during April 2025-March 2026, given higher output in wider domestic industries, according to government affiliated think-tank the Institution of Energy Economy Japan (IEEJ). The country's crude steel output will increase by 4.1pc on the year to 86.5mn t in 2024-25, according to the IEEJ's projection on 24 December. This will mark the first year-on-year growth in four years. A recovery is mostly attributed to an uptrend in wider domestic industrial sectors including automobile, electric and industrial machinery, IEEJ said. It sees domestic car output increasing by 1.8pc to 8.9mn units from a year earlier. IEEJ did not provide further details, but it suggested that expanding investment for digital and green transformation will underpin the steel demand throughout the period. The think-tank also predicts that the country's steel product exports will increase by 1.2pc on the year following an upward trend in the global manufacturing sectors. Japan delivered around 32mn t of steel products overseas during 2023-24, according to the industry group the Japan Iron and Steel Federation (JISF). The country's crude steel output has been sluggish throughout 2024, partly owing to weak demand from the construction and automobile sectors. Rising material costs and labour shortages have led to fewer construction projects in the country, weighing on steel demand. Operational suspensions at major auto manufacturers including Toyota and Daihatsu, following alleged false reporting on safety test results, also pressured steel demand. This partially led to the tenth consecutive month of year-on-year decline in booked orders of ordinary steel for car use in October, according to JISF. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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