US HRC: Prices hit $600 as lead times remain extended

US hot-rolled coil (HRC) spot prices continued to increase as lead times remained extended and mills held the line selling at higher spot prices.

The Argus weekly domestic US HRC assessment rose by $5/short ton (st) to $600/st ex-works Midwest, the highest price level since mid-March, when large parts of the US economy began shutting down because of Covid-19-related stay-at-home orders.

Lead times rose slightly to 8-10 weeks from 8-9 weeks, with market participants saying there was limited availability for November. Some mills have said they are essentially booked through November and have not yet opened up December bookings.

Market participants expected the rally to hold through the end of the year, as many are still struggling to buy what they need. Some noted that the long lead times prompted them to hold off on buying due to uncertainty in the market.

The biggest news in the market was Cleveland-Cliffs' purchase of ArcelorMittal's US assets on Monday for $1.4bn, with a total value of $3.3bn including debt.

The acquisition transforms Cleveland-Cliffs from a raw materials company at the beginning of 2020 to one of the largest North American steelmakers.

The current expectation for the October ferrous trade is for pricing of #1 busheling scrap delivered US Midwest mills to be flat to up $20/gross ton (gt).

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices was $341.07/st, up by 1.5pc compared to the prior week. The spread was 4.1pc higher than the $327.71/st recorded a year ago.

The domestic US cold-rolled coil (CRC) assessment increased by $10/st to $790/st, while the hot-dipped galvanized (HDG) coil assessment increased by $5/st to $800/st. Lead times for CRC increased to 10-12 weeks from 10-11 weeks, while HDG lead times were flat at 10-12 weeks.

HRC import prices into Houston rose by $20/st to $560/st ddp on offers from South Korea for delivery in January or February. There was a noted unwillingness in the marketplace to place import orders because of the long lead times and continued uncertainty in the market.

Futures prices in the CME HRC futures market continued their downward trend over the last week. November futures slipped by $3/st to $582/st, while December prices fell by $8/st to $575/st. January HRC futures dropped by $9/st to $571/st, while February prices fell by $10/st to $571/st . March prices dropped by $11/st to $571/st.

Plate

The Argus weekly domestic US plate assessment was flat at $580/st and lead times were down to 4-6 weeks from 6 weeks. While demand remains low, plate producers and ArcelorMittal, Nucor and SSAB Americas increased prices in the last two days.