US HRC: HRC hits 2020 low on soft demand

Hot-rolled coil (HRC) spot prices hit their lowest levels for the year as spot demand weakened further in the last week after ferrous scrap prices declined and many mills were reported to have short lead times.

The Argus weekly domestic US hot-rolled coil (HRC) index fell for a fourth consecutive week, moving down by $17.75/short ton (st) to $462/st ex-works Midwest on seven indications from sell- and buy-side sources, the lowest level since Argus launched the price in August 2018.

The price is down by 1.9pc from the previous low of $470.75/st recorded in April, and is 24pc lower since the beginning of the year.

Lead times fell to 2-3 weeks from 3 weeks, with electric arc furnace (EAF) minimills having ample availability.

Many service centers said demand remains 20-40pc below pre-Covid 19 levels, with some reporting that automotive has recovered to 80pc of its pre-Covid demand levels. A few of the major automakers in the US say they have returned to pre-Covid levels of production as they attempt to build up vehicles stocks depleted during their nearly two month outages that ran from March to May.

The market also softened after a $40/gross ton (gt) decline in pricing for ferrous scrap #1 busheling delivered to the US Midwest last week.

The domestic US cold-rolled coil (CRC) assessment dropped by $40/st to $640/st, while the hot-dipped galvanized (HDG) coil assessment fell by $40/st to $635/st. Lead times for both products were flat at 5-7 weeks.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices was $212/st, up by 9.3pc compared to the prior week as a $40/gross ton (gt) decline in ferrous scrap prices outweighed the decline in HRC prices. Year-over-year, the spread is 32pc lower than the $309/st recorded a year ago.

HRC import prices into Houston fell by $10/st to $450/st ddp on lower offers from Asia.

Futures prices in the CME HRC futures market were down in the last week. August prices dropped by $25/st to $475/st, while September futures prices fell by $15/st to $498/st. October HRC futures fell by $12/st to $506/st, while November futures fell by $13/st to $506/st. December prices dropped by $11/st to $509/st. January HRC futures prices fell by $7/st to $524/st, while February prices were at $528/st.

Plate

The Argus weekly domestic US plate assessment fell by $17/st to $568/st as demand remained low.

Summary of market activity heard by Argus:

• HRC, US: Tradeable value at $480/st, ex-works Midwest, according to seller
• HRC, US: Tradeable value at $470/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $470/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $445/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $460/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $460/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $450/st, ex-works Midwest, according to buyer