US HRC: Buyers wary as prices edge up

US prices for hot-rolled coil (HRC) ticked up as buyers avoided the spot market and mills continued to try to hold prices above $600/st.

The Argus weekly domestic US HRC index increased by $2.50/st to $617.50/st ex-works Midwest today on eight indications from buy and sell-side sources.

Lead times widened to 6-8 weeks from 7-8 weeks, as mills continue to be booked up into March but some have availability sooner.

Sentiment in the market has begun to turn downward as expectations are that scrap prices will fall in February.

Nucor chief executive Leon Topalian, in his first conference call leading the company, said the period of destocking by steel service centers seen in most of 2019 ended in the fourth quarter.

The electric arc furnace (EAF) steelmaker believes that both pricing and demand will be more stable in 2020 as service centers return to more normal buying patterns.

Many in the ferrous scrap market expect scrap prices to fall by at least $20/gross ton (gt) in February, weighing on sentiment in the finished steel market. Export prices to Turkey have fallen by 10pc since the beginning of the year to $275/metric tonne.

Nucor today also announced that it is ramping up its new 450,000 st/yr rebar mill in Sedalia, Missouri. That mill is expected to consume more than 480,000 st/yr of ferrous scrap.

HRC import prices into Houston rose by $10/st to $660/st ddp as demand for imported HRC remains muted amid lower domestic prices. International markets may pull back somewhat as they evaluate the impacts of the coronavirus in China.

Plate prices rose by $15/st to $695/st as sellers try to force higher spot prices and buyers avoid the spot market due to low demand.

The CME HRC futures market fell compared to last week, with March HRC prices down by $7/st to $568/st while April future prices slipped by $1/st to $559/st. May prices fell by $3/st to $556/st, while June HRC futures fell by $2/st to $556/st.

Summary of market activity heard by Argus

• HRC, US: Tradeable value at $620/st, ex-works Midwest, according to seller
• HRC, US: Tradeable value at $640/st, ex-works Midwest, according to seller
• HRC, US: Tradeable value at $615/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $615/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 $615/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 $635/st, ex-works Midwest, according to buyer