US HRC: Prices fall as steelmakers attempt price hike

US hot-rolled coil (HRC) prices continued to slide over the past week even as some steelmakers try to hike prices and the market feels for a price floor.

The Argus domestic US HRC index fell by $13.75/st to $521.75/st ex-works Midwest today on six indications from sell and buy-side sources.

Lead times have risen to 3-5 weeks from 2-3 weeks as more buyers work to make deals before prices increase.

Today electric-arc furnace (EAF) steelmaker Nucor announced price increases of $40/st for HRC, cold-rolled coil (CRC) and hot-dipped galvanized (HDG) products. NLMK also announced a price floor of $560/st for HRC, and $700/st for CRC and HDG products.

USS-POSCO Industries (UPI), a joint venture between US Steel and South Korean steelmaker POSCO, announced a price increase of $40/st for HRC pickled and oiled, CRC and HDG products at its finishing mill in northern California.

It is unclear whether or not the price increases announced today will stick, especially because the last time Nucor attempted to prop up prices in February was short lived. At the time the company made two announcements totaling $80/st of price increases, only to have prices slip more than $181/st between the end of February and today.

Many expected some price hikes after the 18 June announcement by Pittsburgh-based integrated steelmaker US Steel that it is idling two blast furnaces - one at its Great Lakes Works in Michigan and another at its Gary Works in Indiana. US Steel said the idling will remove 200,000-225,000 st/month of production.

Market participants believe a price floor is being reached, with large buyers still able to squeeze in deals of a couple thousand tons below $500/st. Many say low-priced deals have been drying up.

One midwest electric-arc furnace (EAF) mill said it was already booked for July and was looking at starting to book August, and is among its strongest booking periods so for for the year. The mill said buyers large and small are coming in to try to buy steel in order to not miss the bottom.

Prices for HRC imports into Houston fell by $10/st to $540/st ddp. Preliminary US Commerce Department steel import data from May from today shows total US steel imports fell by 30pc to 1.87mn t compared to 2.66mn t in May 2018, led by declines in blooms, billets and slabs. Through April steel imports into the US have fallen by 7.4pc to 10.44mn t compared to 11.29mn t for the same period of 2018.

The CME HRC futures market for August rose by $22/st to $572/st yesterday. September prices increased by $35/st to $590/st, while October prices jumped $37/st to $604/st. Steel traders now expect forward prices to rise above $600/st after September for the first time since the beginning of June.

Summary of market activity heard by Argus

• HRC, US: Tradeable value at $520/st ex-works Midwest, according to seller
• HRC, US: Tradeable value at $530/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $510/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $510/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $535/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $525/st ex-works Midwest, according to buyer