US HRC: Steel prices rise as mills hold offer levels

US prices for hot-rolled coil (HRC) continued to rise as mills held the line on spot offers at $600/short ton (st).

The Argus weekly domestic US HRC index rose by $13/st to $576.75/st ex-works Midwest today on two bids and seven indications from buy and sell-side sources. Prices have risen for seven consecutive weeks.

Lead times pushed out a week to seven weeks, with more mills lead times pushing into late-January as demand has remained strong.

Mills continue to hold offers at $600/st. Many buyers are buying on contracts, which could be as much as $90/st below the mill's asking price.

Ferrous scrap prices rose by $30-40/gt during the December buying period, with many in the scrap industry optimistic that prices will continue to rise in January anywhere from $10-30/gt.

US Steel reported that the planned maintenance of its Gary Works blast furnace No 4 will take 200,000st of production offline in the second quarter of 2020.

Blast furnace No 4 was taken offline after a water leak on 27 November, and production should be restored this week. US Steel says blast furnace No 8, which was taken offline in July due to poor market conditions, is also supposed to start production this week. No 8 is being brought online to cover the lost production of No 4 when it goes down for maintenance starting in April.

After declaring he wanted to impose 25pc Section 232 steel tariffs on imported steel from Argentina and Brazil on 2 December, President Donald Trump's administration has yet to file any documents in the US Federal Register to push the tariffs forward.

If the tariffs were to be imposed, the most impacted would be ArcelorMittal's Calvert joint venture in Alabama, and NLMK's rerolling mill in Pennsylvania. NLMK confirmed that it had to reduce its workforce this month, and that it is running its 2mn st/yr Pennsylvania mill at 60pc.

HRC import prices into Houston rose by $26/st to $586/st ddp as global steel prices rose. Demand for imported HRC is still muted due to low domestic prices and long lead times.

Plate prices increased by $2/st to $662/st as demand remains muted.

The CME HRC futures market rose last week, with February prices down by $8/st to $591/st, while March HRC prices fell by $7/st to $591/st. April future prices decreased by $8/st to $592/st, while May prices are at $593/st. Futures prices now top out at a high of $593/st for 2020.

Summary of market activity heard by Argus

• HRC, US: Tradeable value at $600/st, ex-works Midwest, according to seller
• HRC, US: Tradeable value at $590/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $560/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $575/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $575/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $540/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $560/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $600/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $590/st, ex-works Midwest, according to buyer