The persistent decline in US hot-rolled coil (HRC) pricing continued this week although larger buys and mill resistance appear to be influencing the market in an attempt to set a price floor.
The Argus weekly domestic US HRC Midwest assessments fell by $13.75/short ton (st) to $846.25/st, while the southern assessment fell by $13/st to $847/st. The price declines were the smallest since late-April, when prices began declining from their recent peak of $1,500/st. Since then the HRC assessments have fallen by 44pc.
HRC lead times in the Midwest rose to 3-5 weeks from 2-3 weeks, as recent purchases appeared to push some lead times out.
Some service centers still reported short lead times of a few weeks at some mills, while others were booked through August as their companies dealt with production issues at sister mills.
HRC purchases of between 5,000-13,000st were reported, though buyers were not restocking warehouses and said they could buy more tons depending on needs.
Market participants were split on whether HRC pricing is finding a bottom right now, with many looking toward the August scrap trade as a leading indicator. Initial reads are that pricing for #1 busheling scrap, a major raw material in the US, will likely be down in August.
Aiding pessimism in the market is reports last week from US steelmakers Cleveland-Cliffs, Nucor, and Steel Dynamics that they will add production in the back half of the year as they ramp up production at three mills.
The Argus HRC import assessment into Houston was flat at $820/st ddp on limited offers.
The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices fell by 3.2pc to $423/st. A year ago the spread was $1,266/st and was weeks from hitting the peak spread of $1,441/st reached in mid-September.
The Argus weekly domestic US cold-rolled coil (CRC) assessment fell by $34.25/st to $1,244/st, while the hot dipped galvanized (HDG) coil assessment fell by $37.50/st to $1,235.25/st. The CRC market was said to be stronger than the HDG market.
Lead times for CRC and HDG expanded to 4-6 weeks from 4-5 weeks.
Unlike the HRC market, bigger buys were not reported in the CRC and HDG markets.
The CME HRC Midwest futures market were all up in the last week and the market moved into contango for the first time since early April. September futures increased by $6/st to $850/st, while October prices rose by $16/st to $860/st. November prices rose by $15/st to $860/st, while December price increased by $15/st to $865/st. January prices jumped by $20/st to $885/st, and February futures prices were flat at $870/st.
Plate
The Argus weekly domestic US ex-works plate assessment rose by $15/st to $1,860/st on mill offers. Lead times rose to 4-6 weeks from 3-5 weeks.
The plate delivered assessment rose by $4.50/st to $1,932/st.
