<article><p class="lead">US hot-rolled coil (HRC) spot prices continued to fall this week on low spot demand and declining scrap prices.</p><p>The <i>Argus</i> weekly domestic US HRC index fell by $4/st to $538/st ex-works Midwest today on one transaction and five indications from buy- and sell-side sources.</p><p>Lead times stayed steady at 4-5 weeks as many in the market continued to buy on contract, taking advantage of prices lower than on the spot market.</p><p>Some small spot buys were reported, with one service center making purchases of 100st and 160st at $540/st.</p><p>Market participants say meaningful inquiries of a couple thousand tons would easily drop into the $520/st range and possibly lower, with some thinking prices have further to fall, and others wondering if a price floor is coming in the next month.</p><p>As the strike at General Motors (GM) drags into its fourth week, the impact on the steel market seems to be muted so far, but long-term concerns about it weakening demand remain.</p><p>Another factor weighing on HRC prices are the continued decline of US ferrous scrap pricing. Prime scrap prices fell by $40/gross tonne (gt) across the country, with obsolete grades down by $30-35/gt depending on the region.</p><p>During the recent scrap buy, market participants said at least one flat-rolled mill in the Ohio Valley had a reduced buy. </p><p>HRC imports into Houston fell by $20/st to $560/st as lower scrap prices and falling global HRC prices have helped foreign producers drop their prices into the US. </p><p>But long lead times and the continued decline in US pricing are keeping many from pursuing HRC imports.</p><p>Plate prices fell to $680/st as the spot market remained muted with mills reportedly not gaining new orders after returning from outages. Some in the market say service center inventories are getting patchy due to a lack of spot buying to replenish inventories, which will eventually push some back into the market. Despite that, many expect prices to continue to slip along with HRC pricing.</p><p>The CME HRC futures market dropped in the last week, with November prices falling by $12/st to $500/st while December futures for HRC fell by $9/st to $512/st. January HRC prices fell by $5/st $525/st, while February prices slipped $1/st to $529/st.</p><h3>Summary of market activity heard by Argus</h3><ul><li>HRC, US: Transaction at $540/st, ex-works Midwest, according to buyer</li><li>HRC, US: Tradeable value at $540/st, ex-works Midwest, according to seller</li><li>HRC, US: Tradeable value at $540/st, ex-works Midwest, according to seller</li><li>HRC, US: Tradeable value at $540/st, ex-works Midwest, according to buyer</li><li>HRC, US: Tradeable value at $530/st, ex-works Midwest, according to buyer</li><li>HRC, US: Tradeable value at $510/st, ex-works Midwest, according to buyer</li></ul></article>
