US HRC: Prices fall, overall market stalling

US hot rolled coil (HRC) prices fell for the first time in more than four months as the overall market has stalled.

Mills continue to hold offer prices at the high end of their range but have been willing to transact at lower levels.

The Argus weekly domestic US HRC Midwest assessment fell by $25/short ton (st) to $1,175/st, while the southern assessment slipped by $4/st to $1,175/st.

This marks the first price decline since the end of November 2022, when HRC prices hit $628/st before seven rounds of price increases pushed HRC up by 87pc.

A mill source indicated their average HRC selling price was at $1,180/st for the last week with transactions between $1,175-1,200/st. They noted lead times for most products were into June and demand was resilient.

Most buys-side contacts indicated a slightly wider range on offers in the market, with the bulk falling between $1,150-1,200/st. Despite mill indications of longer lead times on coil, there were some buyers citing shorter delivery times from the domestic mills.

One service center source said there was a growing inconsistency in the market for deliveries. He had recently asked for a 1,000st order from a mini-mill and was given a lead time for the second week of May. He followed up the inquiry with a second for an easily produced order of 800st and was offered the last week of July.

The Argus HRC Midwest lead times shrank to 7-9 weeks from 8-9 weeks, with market source indicating lead times stalling out in late-May or early June.

Service centers have grown increasingly cautious with the volumes they're purchasing, as have their customers.

Multiple buyers have noted that mills have been delivering steel early, in some cases a month or more earlier. The early deliveries have led a growing number of service centers and other buyers to doubt the longer lead times mills have been consistently reporting for the last few months.

One buyer said inquiries are down to 10pc of normal levels, and have fallen off. Multiple buyers noted inquiry levels have fallen recently, primarily due to uncertainty in the market and also somewhat influenced by the Easter and Passover holidays last week.

Slightly softer domestic HRC prices were coupled with a slight drop in import pricing. The Argus HRC import assessment into Houston fell by $7/st to $980/st on offers from Brazil into Houston. The Brazilian imports are for June and July delivery, with other countries pushing into August and not attractive due to the long lead times and domestic pricing uncertainty.

US CRC and HDG

The Argus weekly domestic US cold rolled coil (CRC) fell by $25.20/st to $1,360/st, while the hot dipped galvanized (HDG) coil assessment was down by $11.39/st to $1,350/st.

One mill reported selling CRC and HDG in a range of $1,300-1,330/st, while

offer ranges for CRC were from $1,360-1,400/st and HDG offers were $1,300-1,400/st. Prices fell to competitive offer levels as lower priced sales were limited in number.

Lead times for CRC and HDG were both flat at 8-9 weeks.

CRC demand seems to be relatively stable for the supply-constrained product. HDG demand is being negatively impacted by slowing construction demand, depending on the service center. Appliances and HVAC used in residential buildings are seeing the steepest slowdown, while demand from non-residential construction and bigger multifamily units are mixed.

The CME HRC Midwest futures market was down in the last week by double digits. May prices were down by $12/st to $1,093/st, while June futures prices fell by $17/st to $989/st. July prices fell by $15/st to $920/st, while August futures were down by $12/st to $888/st. September prices dropped by $20/st to $860/st, while October prices fell by $15/st to $849/st. November prices are at $830/st.

Plate

The Argus weekly domestic US ex-works plate assessment was flat at $1,535/st as the market continues to wait to see what electric arc furnace (EAF) platemaker Nucor will do next with its June pricing. Market participants said demand is relatively strong and mills are booked out through May.

Lead times fell to eight weeks from 9-10 weeks as the market waits for June books to open up.

The plate delivered assessment was flat at $1,600/st.