US HRC: Prices fall despite longer EAF lead times

Domestic hot-rolled coil (HRC) prices continued to fall, with low prices still being reported and prime scrap prices also expected to decline further this week, though lead times at electric arc furnace (EAF) minimills appeared to be improving.

The domestic US HRC assessment fell by $5/short ton (st) to $450/st. Lead times extended to 3-4 weeks from 2-3 weeks in the prior week.

While HRC prices fell, some tubular buyers entered the market to snap up available spot tons at the electric arc furnace (EAF) minimills, helping to extend their lead times.

A $40/st flat-rolled price increase put out by integrated steelmaker's AK Steel, ArcelorMittal and US Steel has been largely unsuccessful as minimills have held prices low in order to garner more demand.

Overall demand is still reportedly off by double digits compared to pre-Covid levels, and no one expects pricing to rise quickly nor significantly. Ferrous scrap prices, which were expected to fall, have begun the August trade at levels down $20/gross ton (gt) for busheling, the primary grade used by flat-rolled minimills. Shredded and other obsolete scrap grades are facing less downside in August because of a firm export prices.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices narrowed to $200/st, down by 2.4pc compared to the prior week. Year-over-year, the spread is 40pc lower than the $331.14/st recorded a year ago.

The domestic US cold-rolled coil (CRC) assessment was flat at $640/st, while the hot-dipped galvanized (HDG) coil assessment was fell by $5/st to $630/st. Lead times for both products were flat at 5-7 weeks.

HRC import prices into Houston were flat at $460/st ddp, with many saying imports are not possible with domestic prices so low.

Futures prices in the CME HRC futures market rose in the last week. September futures prices rose by $8/st to $516/st, while October HRC futures increased by $13/st to $528/st. November futures rose by $9/st to $528/st, while December prices rose by $11/st to $532/st. January HRC futures increased by $11/st to $539/st, while February prices were up by $10/st to $541/st.

Plate

The Argus weekly domestic US plate assessment was flat at $560/st.