US HRC: Prices fall on lower offers

US hot-rolled coil (HRC) prices fell this week on lower offers, a quiet spot market and as lead times shrank.

The Argus weekly domestic US HRC Midwest assessment fell by $15/short ton to $1,910/st. The southern HRC assessment dropped by $25/st to $1,895/st, the first time the southern HRC price has been below $1,900/st since 10 August.

Sales of $1,920/st for November were reported in the Midwest, with offers as low as $1,840/st, while in the south, no sales were reported and offers ranged from $1,850-1,960/st.

Lead times in the Midwest fell to 4-6 weeks from 6-7 weeks.

The price fall was of little surprise as many buyers continue to buy solely on contract and their customers pull back from the market. Many buyers were sitting on the sidelines as prices are expected to continue to fall.

There are some signs that demand may see an uptick, with General Motors announcing last week that it would have no semiconductor-related plant shutdowns the week of 1 November, and that it would add some overtime shifts to six of its North American automotive plants during the month.

Labor constraints have become one of the main bottlenecks in the market, crimping demand further from customers unable to have enough workers to build products.

Integrated steelmaker US Steel said it is working on a partnership with an unnamed company to build a 500,000st/yr pig iron caster at its Gary Works steelmaking complex in Indiana. The pig iron will be supplied to US Steel's electric arc furnace (EAF) flat-rolled mill in Arkansas.

HRC import prices into Houston were flat at $1,430/st ddp.

Over the weekend the US agreed to lift 25pc steel tariffs on EU steel under a quota system, raising the possibility of increased flows from the continent to the US. While the market is still figuring out the impacts, some speculated that the loosening of trade restrictions may lower US prices while bolstering European steel prices.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices fell to $1,399/st from $1,414/st, and is expected to contract further with busheling expected to post price gains in the November trade. The spread is over three times as wide as the $422/st from a year ago.

The Argus weekly domestic US cold-rolled coil (CRC) assessment fell by $30/st to $2,155/st while the hot-dipped galvanized (HDG) assessment fell by $30/st to $2,160/st.

Lead times for CRC fell to 8 weeks from 8-10 weeks while HDG lead times fell to 8-10 weeks from 9-11 weeks.

Most of the CME HRC Midwest futures market rose significantly in the last week. December pricing fell by $36/st to $1,654/st, while the January futures price dropped by $55/st to $1,540/st. February fell by $30/st to $1,435/st, while March pricing declined by $18/st to $1,340/st. April pricing fell by $41/st to $1,245/st.

Plate

The Argus weekly domestic US plate assessment was flat at $1,880/st delivered. Lead times expanded to 6-9 weeks from 7-8 weeks.