US HRC: Prices continue to move up, market stable

US hot-rolled coil (HRC) spot prices continued to rise this week as supply remained tight and mills continued to receive their higher price targets.

The Argus weekly domestic US HRC assessment rose by $10/short ton (st) to $650/st ex-works Midwest, the highest price level since early May 2019.

Lead times stayed steady at 8-10 weeks, with November availability shrinking and December availability said to be thin.

Prices have rallied more than 44pc since hitting a yearly low of $450/st in mid-August, and many expect the higher prices to hold through the end of the year. One integrated steelmaker expects HRC pricing to reach $700/st by Thanksgiving and remain there through December. Still, yet another market participant said it was more likely for the market to end the year at $500/st than $700/st. More market participants have begun questioning the strength of the rally, especially as some flat-rolled steel capacity is coming online.

Canadian integrated steelmaker Stelco is restarting its blast furnace after being idled for more than two months for upgrades. Arkansas-based electric arc furnace (EAF) steelmaker Big River Steel is expected to start rolling steel from its 1.65mn st/yr expansion next month.

The capacity additions could help lessen supply pressures, which have been driven partially by ArcelorMittal and US Steel continuing to keep three blast furnaces with a pig iron production capacity of 4.4mn st/yr idled.

The ferrous scrap trade in the US saw prices stay mostly flat, defying expectations that #1 busheling scrap delivered US Midwest mills could rise as much as $20/gross ton (gt).

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices was $386.61/st, up by 1.5pc compared to the prior week. The spread is 30pc higher than the $296.57/st recorded a year ago.

The domestic US cold-rolled coil (CRC) assessment increased by $5/st to $845/st, while the hot-dipped galvanized (HDG) coil assessment stayed flat at $850/st. Lead times for CRC were flat at 11-12 weeks, while HDG lead times were flat at 12 weeks.

HRC import prices into Houston rose by $40/st to $620/st ddp.

Near term futures prices in the CME HRC futures market jumped this week. December prices jumped by $25/st to $627/st, while January HRC futures increased by $11/st to $601/st. February prices ticked up by $2/st to $589/st, and March prices slipped by $2/st to $583/st. April prices also slipped by $1/st to $581/st.

Plate

The Argus weekly domestic US plate assessment increased by $30/st to $630/st and lead times were flat at 4-6 weeks.