US HRC: Prices drop for fourth week

: Metals
21/11/23

US hot-rolled coil (HRC) prices dropped this week as activity slowed heading into the Thanksgiving holiday.

The Argus weekly domestic US HRC Midwest and southern assessments both fell by $55/short ton to $1,780/st, the lowest price since the beginning of July.

Sales of $1,800-1,820/st for December were reported, with offers as low as $1,740/st. Some pegged the spot market as low as $1,700/st.

Lead times in the Midwest fell to 4-5 weeks from 5-7 weeks.

The spot market remained muted as many took the Thanksgiving holiday off and buyers continued to try to work down their inventories.

Some service centers need to buy more steel in the next month as they have been staying out of the spot market and buying minimally on their contracts for some time.

Electric arc furnace (EAF) steelmaker Nucor on Tuesday took its 1.6mn st/yr Gallatin, Kentucky, flat-rolled mill down for its 25-day outage to integrate its 1.4mn st/yr expansion.

North American automakers broadly plan to take their seasonal holiday outages this winter after some of them tried to work through their seasonal summer outages.

HRC import prices into Houston dropped by $50/st to $1,410/st ddp.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices fell by 4.2pc compared to the prior week to $1,251/st. Its the lowest the spread has been since mid-July, and it is more than double compared to the $492/st from a year ago.

The Argus weekly domestic US cold-rolled coil (CRC) assessment was flat at $2,145/st while the hot-dipped galvanized (HDG) assessment fell by $14/st to $2,146/st. Pricing for value-add products have remained elevated, increasing the spread with HRC to $350/st from around $300/st in the prior week. The market generally prices the HRC to value-add spread at $200/st.

Lead times for CRC increased to 9-10 weeks from 8-9 weeks while HDG lead times increased to 10-12 weeks from 8-9 weeks.

The CME HRC Midwest futures market fell in the last week. The January futures price fell by $22/st to $1,538/st, while February pricing dropped by $30/st to $1,445/st. March pricing fell by $21/st to $1,354/st, while April pricing moved down by $15/st to $1,295/st. May futures pricing fell by $14/st to $1,270/st.

Plate

The Argus weekly domestic US plate assessment incresed by $20/st to $1,900/st delivered as a price increase from steelmaker SSAB pushed pricing higher. Lead times shrank to 6-8 weeks from 7-8 weeks.

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24/10/03

Indonesia’s Ni expansion via HPAL could face challenges

Singapore, 3 October (Argus) — Indonesia is expected to continue expanding its nickel production in the coming years, especially through increasing its high-pressure acid-leaching (HPAL) capacity, but the lack of readily available sulphuric acid and proper management of the tailings waste could pose challenges to this plan. Production is expected to rise despite an anticipated surplus in the supply of nickel in the market. Sulphuric acid is used in the HPAL process to separate nickel and cobalt from nickel ore to produce mixed hydroxide precipitate (MHP), which is the feedstock for the downstream processing of nickel sulphate, cathode and battery. Indonesia is expected to produce 325,000-345,000t of MHP this year, up from around 269,000t of in 2023, according to market sources. But with several MHP projects planned to come online in the next few years, MHP output for the next three years is projected to treble to 800,000-900,000t, according to the country's deputy minister for the co-ordinating ministry for maritime and investment affairs Septian Hario Seto on 2 October at a metal event in London. As this would require a lot more nickel ore and sulphuric acid, there are concerns that the availability of limonite ore could deplete as fast as the saprolite ore supply, which is mainly used for nickel pig iron and matte production. There were also discussions that the Indonesian government will convene with nickel market participants to discuss about the supply situation of limonite ore. There are currently four HPAL facilities operating in Indonesia. This includes Huayou's Huayue and Huafei projects , GEM's QMB project and Lygend's HPAL project. Others were also concerned that the availability of sulphuric acid could be a limiting factor to Indonesia's rapid expansion of HPAL production, as sulphuric acid demand from Indonesian HPAL projects is expected to reach 7.12mn t in 2025, almost 40pc increase from this year's demand at 5.17mn t, according to Argus estimates. Indonesia has been importing sulphuric acid from mainly China and South Korea to meet the growing demand for its production units at Obi Island and Sulawesi. But a ramp-up in sulphur-burning operations has pushed several MHP producers like Halmahera Persada Lygend to switch to buying lower-cost sulphur instead. For most sulphur burners, 1t of sulphur produces around 3t of sulphuric acid. The startup of Freeport McMoran's Manyar smelter in Java integrated industrial and port estate in East Java's Gresik, coupled with mining firm Amman Mineral Nusa Tenggara's (AMNT) copper smelter in the West Sumbawa regency of Nusa Tenggara province, is also expected to alleviate some supply concerns, with the two expected to add at least 3mn t/yr of acid capacity by the end of 2025. Proper disposal of tailings waste could pose another challenge to Indonesia's planned HPAL expansion, particularly with increasing scrutiny on the environmental, social and governance (ESG) standards by Indonesia's mining industry. The HPAL process generates a large volume of tailings, with energy consultancy Wood Mackenzie estimating an output of 1.4-1.6t of waste from every 1t of nickel produced through HPAL. There are three common ways to dispose tailings waste – tailings dam, deep sea tailings and dry stacking. Dry stacking is more widely used because it is considered as the more sustainable option. But dry stacking also comes with its own environmental and biodiversity risks, as Indonesia's seasonal wet weather and seismic activity of the site could be a problem for waste storage. To ensure a smooth expansion in HPAL production, it is crucial for Indonesia to find ways to secure the necessary sulphuric acid supplies and to adopt appropriate methods for tailings waste disposal. By Sheih Li Wong and Deon Ngee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

ArcelorMittal increases steel coil offers by €40/t

24/10/02

ArcelorMittal increases steel coil offers by €40/t

London, 2 October (Argus) — Europe's largest steelmaker ArcelorMittal has increased its hot-rolled coil (HRC) offer by €40/t to €590/t base in northwest Europe. All offers below this level have been withdrawn and the company is "firm" on this level, buyers said. One service centre reported an offer around €605/t base, for a small tonnage. NLMK La Louviere has also increased its offer by around €25/t, according to sources. The increases follow a sharp rise in China following the country's recent stimulus announcement, and firmer raw material costs — Argus ' benchmark 62pc Fe ICX iron ore index hit $109.35/dmt on 1 October, up from $88.70/t on 23 September, while fob Australia premium low-volatile coking coal prices jumped by $18.80/t to $204.30/t. Service centres have been trying to add additional tonnages to existing deals in recent days, according to mill sources, which they suggest is a signal buyers think the market has reached a floor. They also anticipate a technical rebound from the automotive sector in the first quarter of next year, after a weaker period of late. Futures markets have also been reacting to the increases in China, and talk of higher EU offers. As off 11:23 London time (10:23 GMT), over 26,000t had traded on the CME Group's north European HRC contract, with two 10,000t January-February spreads trading at -€10/t, lessening the pronounced contango of recent days. A 4,000t October-December spread traded at -€65/t, with the outright prices at €565/t and €630/t. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US factory activity contracts for 6th month: ISM

24/10/01

US factory activity contracts for 6th month: ISM

Houston, 1 October (Argus) — US manufacturing activity remained in contraction in September for a sixth consecutive month, as a measure of prices shrank for the first time this year and new orders and production weakened, but at diminishing rates. The manufacturing purchasing managers index (PMI) registered 47.2 in September, matching August's reading, the Institute for Supply Management (ISM) said today. The PMI reading, below the 50 threshold signaling contraction, marked a 22nd month of contraction out of the last 23 months. Manufacturing accounts for about 10pc of the US economy, and the largest part of the economy — services — has expanded in six of the last eight months through August this year. ISM's services PMI report will be released Wednesday. "Demand remains subdued, as companies showed an unwillingness to invest in capital and inventory due to federal monetary policy … and election uncertainty," ISM said. "Production execution stabilized in September. Suppliers continue to have capacity, with lead times improving and shortages reappearing." The Federal Reserve on 18 September cut its target lending rate by a half point, its first cut since 2020, and signaled another 150 basis points of cuts were likely through 2025, as it has succeeded in bringing inflation close to its 2pc target. A key employment report on Friday will factor into the Fed's thinking, with little more than a month to go before the 5 November presidential election. The new orders index rose to 46.1 in September from 44.6 in August, reflecting a diminishing rate of contraction. Production rose to 49.8, still contracting but approaching expansion territory, from 44.8 the prior month. Employment fell to 43.9 in September from 46 the prior month, reflecting a more rapidly weakening labor market. New export orders fell to 45.3 in September, showing deepening contraction, from 48.6, and imports fell to 48.3 from 49.6. Prices fell to 48.3 from 54. Inventories fell to 43.9, returning to pre-August low levels, from 50.3, while customers' inventory levels rose by 1.6 points to 50 in September, suggesting a "demand level that is neutral to negative for future new orders and production," ISM said. The prices index registered 48.3, down from 54 the prior month, indicating raw material prices fell last month after eight straight months of increases. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UK TRA gets approval on split HRC import quota proposal

24/10/01

UK TRA gets approval on split HRC import quota proposal

London, 1 October (Argus) — The UK Trade Remedies Authority (TRA) on 30 September received government approval of its recommendation to split and increase hot rolled coil (HRC) import quotas, but has been requested to reassess its proposal to temporarily suspend the quotas. The UKA TRA on 30 September made a separate recommendation to suspend the quota for nine months, in light of Tata Steel UK's closure of its blast furnaces and increased imports of HRC. It started its review of this in February 2024 at the request of Tata and steel importer Kromat. But following the government's approval of its recommendation to split the HRC import quotas , the TRA should reassess its recommendation to suspend the quotas, the secretary of state for business and trade, Jonathan Reynolds, said on 30 September. "I would like the TRA to analyse whether, following implementation of the TRQ review solution, the temporary change in market conditions still persists", he said, adding the reassessment should be completed by 31 December 2024. The government's acceptance of the recommendation to split HRC quotas means that from 1 October there will be a 1A quota and 1B quota in place, and the latter can only be used for companies completing downstream processing. The 1A quota for October-December will be 249,391t, and is divided on a country-by-country basis, with the EU getting the largest chunk of the quota at 187,484t. The quota for other countries will be 23,587t. The 1A quota totals 1mn t/yr. The 1B quota will be 578,587t for October-December, and can be sourced globally with a 40pc individual country cap, after which a 25pc duty would be payable. The 1B quota is 2.36mn t/yr, higher than the 1.9mn t/yr recommended by the TRA. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Some eastern US rail shipments restart after Helene

24/09/30

Some eastern US rail shipments restart after Helene

Washington, 30 September (Argus) — Some railroad operations in the southeastern US have resumed in the aftermath of Hurricane Helene, but major carriers warn that some freight may be delayed while storm-damaged tracks are repaired. Rail lines in multiple states were damaged after Hurricane Helene made landfall on the northeastern Florida coast on 26 September as a category 4 storm and traveled northwards as a downgraded but still dangerous storm into Georgia, Tennessee, and the Carolinas. The storm left significant rain and wind damage in its wake, including washed-away roads, flooded lines, downed trees and power outages. Eastern railroads CSX and Norfolk Southern (NS) said they are working around the clock to restore service to their networks. Norfolk Southern said it had made "significant progress" towards its recovery with most major routes back in service including its Chattanooga, Tennessee, to Jacksonville, Florida, line as well as its Birmingham, Alabama, to Charlotte, North Carolina route. Norfolk Southern said freight moving through areas that are out of service could "see delays of 72 hours". Several of Norfolk Southern's other routes remain out of service, including rail lines east and west of Asheville, North Carolina, because of historic levels of flooding. There are multiple trees to remove along a 70-mile stretch from Macon, Georgia, to Brunswick, Georgia. And downed power lines are keeping the railroad's lines from Augusta, Georgia, to Columbia, South Carolina, and Millen, Georgia, out of service. CSX said "potential delays remain" but did not provide specifics. However, the railroad said it had made "substantial progress" in clearing and repairing its network. The railroad's operations in Florida have mostly reopened, as have rail lines in its Charleston subdivision, which crosses South Carolina and Georgia. But bridge damage and major flooding has kept CSX's Blue Ridge subdivision out of service. A portion of the line running from Erwin, Tennessee, to Spartanburg, South Carolina, has been cleared, but CSX said "a long-term outage" is expected for other parts of the rail line. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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