US HRC: Prices jump on higher mill offers

US hot-rolled coil (HRC) prices jumped this week as mills aimed for higher prices in January amid increasingly limited supply.

The Argus weekly domestic US HRC index rose by $65/short ton (st) to $820/st ex-works Midwest this week, the largest increase Argus assessment has ever recorded. Lead times were flat at 8-9 weeks. The spot price is the highest since November 2018, and is up by 82pc since a yearly low of $450/st recorded in mid-August.

One large service center bought 10,000st of HRC from a non-Midwest electric arc furnace (EAF) minimill for $840/st for January delivery. The buyer said options were slim, with many mills essentially booked for January and holding off opening up their February books to secure higher prices.

Integrated steelmakers ArcelorMittal and US Steel pushed prices as high as $850/st for January, according to market participants. With little to no spot availability, steel buyers have wondered whether the higher offers mean anything if there is no supply available.

Some manufacturers may be impacted in December because of a lack of steel, said one market participant. Many are still waiting for months of backorders, delayed by steelmakers because of the rush of buying over the last three months.

The ferrous scrap trade is expected to begin this week, with #1 busheling delivered US Midwest expected to increase by as much as $50/gross ton (gt), in large part to keep up with gains in finished steel prices.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices was $556.61/st, 13pc higher than the spread of $491.61/st from the week before and 59pc higher than the $349.46/st recorded a year ago.

The domestic US cold-rolled coil (CRC) assessment rose by $60/st to $970/st ex-works, and the hot-dipped galvanized (HDG) coil assessment increased by $55/st to $970/st. Lead times for CRC and HDG expanded to 10-12 weeks from 12 weeks.

HRC import prices into Houston increased by $60/st to $800/st ddp on continued increases in foreign pricing.

The CME HRC futures market mostly posted gains in the last week, with January futures jumping up by $21/st to $841/st and February prices increasing by $16/st to $821/st. March prices slipped by $1/st to $799/st, while April prices rose by $13/st to $770/st. May futures prices rose by $6/st to $746/st, while June prices increased by $3/st to $738/st.

Plate

The Argus weekly domestic US plate assessment rose by $63.25/st to $770/st on the week on the back of a price increase from Nucor as plate mills attempt to keep pace with HRC increases. Lead times broadened to 6-8 weeks from 8 weeks.