US HRC: Prices move up as 2020 availability shrinks

US hot-rolled coil (HRC) spot prices continued to rise this week as the amount of spot steel available to the market for the rest of 2020 continued to shrink and mills were able to collect higher prices.

The Argus weekly domestic US HRC assessment rose by $25/short ton (st) to $675/st ex-works Midwest, the highest price level since April 2019.

Lead times stayed steady at 8-10 weeks, with spot availability for December said to be low.

Steel Dynamics (SDI) was said to be the main steelmaker who hadn't opened their books for December yet. Integrated mills reportedly have little if any capacity to offer for the rest of the year, and are said to have told customers that their first quarter books are already partially full. One integrated steelmaker said they had been able to sell small amounts of HRC, around 100st, for $700/st.

Many market participants have noted delivery delays from steelmakers, whether integrated or electric arc furnace (EAF) minimills.

Prices have rallied by 50pc since hitting a yearly low of $450/st in mid-August, and many in the market now expect the higher prices to hold through the end of the year and into 2021. Skepticism on the strength of the current rally has been tempered by the continued strength of lead times.

Even the restart by Canadian integrated steelmaker Stelco after being idled for more than two months for upgrades and the pending startup of an expansion by Arkansas-based electric arc furnace (EAF) steelmaker Big River Steel will not drastically change the supply issues facing the market, participants have said.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices was $411.61/st, up by 6.5pc compared to the prior week. The spread is 41pc higher than the $291.57/st recorded a year ago.

The domestic US cold-rolled coil (CRC) assessment increased by $15/st to $860/st, while the hot-dipped galvanized (HDG) coil assessment increased by $30/st to $880/st. Lead times for CRC were flat at 11-12 weeks, while HDG lead times were flat at 12 weeks.

HRC import prices into Houston rose by $60/st to $680/st ddp, though there seems to be little appetite for imports given two to three month lead times.

Near term futures prices in the CME HRC futures market jumped this week, adding to increase from the prior week. December prices rose by $33/st to $660/st, while January HRC futures jumped by $35/st to $636/st. February prices increased by $32/st to $621/st, and March prices rose by $18/st to $601/st. April prices were up by $20/st to $601/st, while May futures prices were at $598/st.

Plate

The Argus weekly domestic US plate assessment increased by $10/st to $640/st and lead times were flat at 4-6 weeks. Both SSAB and ArcelorMittal pushed up $50/st price increases in the last week, but the moves are to try to keep pace with HRC price increases rather than being based on demand, according to plate market participants.