US HRC: Prices jump as October availability limited

US domestic hot-rolled coil (HRC) prices made their biggest jump in two years as lead times extended and mills held the line on higher prices.

The domestic US HRC assessment increased by $45/short ton (st) to $520/st, supported by longer lead times, which increased to 7-8 weeks from 5-6 weeks in the prior week.

Many mills were almost completely booked through October, with some mills of electric arc furnace (EAF) steelmaker Nucor said to have some early to mid-October availability.

Future outages may be playing somewhat into the extended lead times, with EAF steelmaker Big River Steel in Arkansas will have a planned 10-day outage in October, while EAF steelmaker North Star BlueScope in Ohio will have a five to seven-day outage in November.

One market participant said three of Nucor's mills will have outages by the end of the year. The union at steelmaker NLMK's Farrell re-rolling mill in Pennsylvania is still on strike, keeping 2mn st/yr of capacity down.

Nucor and integrated steelmaker US Steel are targeting spot price minimums of $540/st for HRC. Most buyers this week said those not already in queue for tons face paying up to that level.

Prime ferrous scrap prices are expected to rise $20-30/gross ton (gt) in the September trade, further supporting higher HRC pricing.

The price rise is a sharp turnaround from just three weeks ago when the Argus domestic US HRC assessment sat at $450/st, the lowest point in more than two years.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices was $283.39, up by 27pc compared to the prior week. The spread is 17pc lower than the $342.50/st recorded a year ago.

The domestic US cold-rolled coil (CRC) assessment increased by $35/st to $700/st, while the hot-dipped galvanized (HDG) coil assessment increased by $50/st to $720/st. Lead times for CRC rose to 9-10 weeks from 6-8 weeks, while HDG lead times increased to 9-12 weeks from 6-8 weeks as automotive demand and low imports drove domestic demand higher.

HRC import prices into Houston were flat at $480/st ddp.

Futures prices in the CME HRC futures market increased in the last week. October HRC futures jumped by $22/st to $541/st, while November futures rose by $11/st to $545/st. December prices increased by $15/st to $550/st, while January HRC futures rose by $15/st to $556/st. February prices rose by $17/st to $560/st, while March prices increased by $11/st to $556/st.

Plate

The Argus weekly domestic US plate assessment was flat at $560/st, as many market participants said Nucor was still aiming to get price minimums up to the $560/st it set on 21 August.