US hot-rolled coil (HRC) prices decreased for the first time since mid-August, when prices hit a low of $450/short ton (st) before beginning a persistent increase to $1,200/st through 26 January.
The Argus weekly domestic US HRC index fell by $37/st to $1,163/st ex-works Midwest this week. Lead times widened to 6-8 weeks from 7-8 weeks.
Prices fell as trading activity slowed, with few buyers wanting to load up on high-priced steel due to uncertainty over future pricing.
Many market participants agreed that supply issues continue to dominate the market, with mill deliveries still running behind and a lack of available spot tons on the market.
Service center inventories remained low, with many having little ability to restock in the past few months due to rapidly increasing prices and low supply.
Despite the fall this week, the US HRC price is up more than double from a low of $450/st recording on 11 August, a 158pc increase in less than six months.
Steel supply is expected to face additional headwinds in the next few months, with Ohio-based electric arc furnace (EAF) minimill steelmaker North Star BlueScope facing an outage in April, and integrated steelmaker Cleveland-Cliffs idling its Middletown Works blast furnace for maintenance and bringing up its smaller idled No. 6 blast furnace at its Cleveland Works to cover the outage.
In raw material costs, ferrous scrap prices have continued to fall in the last week. Benchmark prices for HMS 1/2 80:20 scrap have fallen by $82/t from an early January peak to $400/t cfr Turkey. That drop is expected to bring down US domestic scrap prices in February, particularly obsolete grades, by between $40-60/gross ton (gt), but prime grade scrap prices appear to face less downward pressure because of resilient steel pricing and firm demand from flat-rolled steelmakers.
The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices fell by 4.9pc to $723.27/st from $760.27/st the week before. The spread was more than double the $337.63/st recorded a year ago.
The domestic US cold-rolled coil (CRC) assessment fell by $30/st to $1,320/st, while the hot-dipped galvanized (HDG) coil assessment fell by $34.50/st to $1,315.50/st. Lead times for CRC widened to 7-9 weeks from 8-9 weeks, while HDG lead times also widened to 7-9 weeks from eight weeks.
HRC import prices into Houston increased by $10/st to $1,020/st ddp. More offers were heard from South Korea, Turkey and Vietnam.
The CME HRC futures market trended upward this week after multiple weeks of declines. For March, prices rose by $10/st to $1,090/st. April prices increased by $8/st to $998/st, while May futures prices rose by $15/st to $905/st. June prices increased by $10/st to $842/st, while July prices edged up by $4/st to $782/st.
Plate
The Argus weekly domestic US plate assessment rose by $2.50/st to $1,052.50/st in higher offers from mills, while lead times fell to 6-7 weeks from 7-9 weeks.
