US HRC: Mills secure price increases

Spanish Market: Metals
24/10/23

US hot-rolled coil (HRC) prices rose this week as mills were able to secure price increases on limited supply, extended lead times and desperate buyers looking for metal.

The Argus US HRC Midwest and southern assessments rose by $50/short ton (st) to $800/st ex-works from the prior week and are now up by $140/st from their September lows.

Prices remain down by 33pc from their April peak of $1,200/st.

Steelmakers Nucor and Cleveland-Cliffs raised their HRC minimum prices to $800/st on 19 October, the first price increase since mid-September, when Cliffs announced a minimum HRC price of $750/st. The same day Canadian mill ArcelorMittal Dofasco raised prices to $803/st, while Stelco increased its prices by C$135/st ($98/st) without setting a minimum HRC price.

One US mill was said to have sold spot tons of less than 1,000st of HRC for $800/st, with repeatable offers at $800/st. Some buyers reported offers as high as $850/st.

Extended lead times continue to support the rise in prices, with the HRC lead time jumping to 8 weeks from 6.9 weeks as mill lead times push into mid-December.

Service centers say longer lead times have led to desperation at some of their customers who are looking for material and some mills reported to be no quoting them for the rest of the year.

Mills remain confident they will be able to fill their HRC books for the rest of the year and have pushed prices up because of their limited availability. Some buyers wonder if mills will have holes open up in December depending on what contract volumes they are able to secure. Maintenance outages that reduced production in September and October are also close to being completed.

The continuing and expanding automotive strike by the United Auto Workers (UAW) union against Ford, General Motors (GM) and Stellantis has not yet had broad impacts on steel demand. The UAW has expanded its strike in the last two weeks to Ford's largest plant, which produces fullsize pickup trucks and SUVs, and in recent days to Stellantis' fullsize pickup truck plant in Sterling Heights, Michigan and GM's fullsize SUV plant in Arlington, Texas. These larger vehicles consume more steel than the other midsize pickup truck and sedan plants that the UAW initially targeted.

The Argus HRC import assessment increased by $10/st to $710/st ddp Houston on higher repeatable offers, with higher offers from South Korea and Brazil. South Korean lead times are in late-January to February, keeping many buyers away, while Brazilian tons under the tariff rate quota program are limited.

Plate

The Argus US plate assessment was flat at $1,405/st ex-works as mill offers diverged and activity remains limited.

While his company does not produce plate Steel Dynamics' chief executive Mark Millett commented on an earnings call last week that current US government paralysis coming from the speaker fight in the House of Representatives would likely delay infrastructure funds from being dispersed this year. This could delay money going toward infrastructure projects that consume plate products.

Lead times were down to 4 weeks from 4.5 weeks as November tons remained available.

Delivered plate pricing was flat at $1,438/st.

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