US HRC: Prices edge up as buyers rebuild stocks

Hot-rolled coil prices in the US continued to edge higher as lead times extended to their longest level so far this year.

The Argus weekly domestic US HRC index rose by $7/st to $710/st ex-works Midwest today on five indications from buy- and sell-side sources. The increase brings HRC pricing close to its highest level since 15 January, when prices were $711/st.

Lead times have moved from 3-5 weeks to 4-6 weeks, with one integrated seller saying its April capacity is booked out. A re-roller said it was also booked through mid-April, a pretty healthy lead time for a slab converter.

Demand from pipe and tube buyers, who were largely absent as prices ran down over the fourth quarter of last year, is returning. Low import levels over the start of the second quarter and construction beginning to recover from a wet beginning to the year are also helping mills, with some buyers trying to fill any inventory gaps with small tonnages ahead of further price increases.

Service center stocks seem to be a slightly lower after buyers sat on the fence for the last few months. And the firmer domestic March scrap buy-week, strengthening Turkish import pricing and relatively firm iron ore and coal costs are all underpinning the increases being sought by mills.

Galvanized coil pricing is starting to rise too, on lower import penetration, with lead times extending out into May recently.

In the last month Nucor and US Steel have announced $80/st price increases, and ArcelorMittal announced a price floor of $730/st at the end of February. Lower priced deals continue to evaporate, with one integrated mill saying it was pushing for prices of $750/st.The Chicago Mercantile Exchange forward curve has pulled back slightly in the last week, with April settling at $728/st on Monday compared to $735/st a week ago. May was at $730/st, while June prices settled at $728/st.

Summary of market activity heard by Argus

HRC, US: Tradeable value at $705/st ex-works Midwest, according to seller

HRC, US: Tradeable value at $745/st ex-works Midwest, according to seller

HRC, US: Tradeable value at $700/st ex-works Midwest, according to buyer

HRC, US: Tradeable value at $700/st ex-works Midwest, according to buyer

HRC, US: Tradeable value at $700/st ex-works Midwest, according to buyer