US hot-rolled coil (HRC) prices continued to rally upward as the market quieted in the run-up to the holidays, with steelmakers working to cement higher prices for the new year.
The Argus weekly domestic US HRC index rose by $57/short ton (st) to $977/st ex-works Midwest this week. Lead times extended slightly to 8-9 weeks from 7-8 weeks. The spot price is the highest since Argus began recording HRC pricing in August 2018 and more than double the price recorded in mid-August, when HRC spot prices hit a yearly low of $450/st.
With the Christmas holiday fast approaching and falling on a Friday and New Years following just a week later, most activity on the market were offers from mills. Many books are closed and mills are waiting to start negotiating in the new year, market participants said.
Few buyers have yet to see supply added to the spot market from new capacity at electric arc furnace (EAF) minimill steelmaker Big River Steel or the restarted blast furnace at integrated steelmaker US Steel's Gary Works in Indiana.
In the Midwest, and particularly the Great Lakes region, steel supply is heard to be very tight due to production issues, some of which have been caused by Covid-19.
The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices ballooned to $639.95/st, 9.8pc higher than the spread of $582.95/st from the week before and 79pc higher than the $357.59/st recorded a year ago. Scrap export prices and domestic steel prices have both continued to rise, fueling expectations for further increases in domestic scrap costs in January of between $60-$80/gross ton (gt).
The domestic US cold-rolled coil (CRC) assessment rose by $6/st to $1,061/st ex-works, and the hot-dipped galvanized (HDG) coil assessment increased by $3.25/st to $1,073.25/st. Lead times for CRC were flat at 8-9 weeks, while HDG lead times also remained flat at 9-10 weeks.
HRC import prices into Houston increased by $130/st to $950/st ddp due to continued increases in global pricing and the impacts of the 25pc Section 232 steel tariff. No trades were reported as long lead times and high prices have kept many from attempting imports.
The CME HRC futures market mostly posted gains in the last week, with February prices rising by $26/st to $980/st and March prices jumping by $48/st to $966/st. April prices increased by $29/st to $921/st, while May futures prices rose by $24/st to $873/st. June prices increased by $30/st to $835/st, while July futures were listed at $823/st.
Plate
The Argus weekly domestic US plate assessment rose by $45/st to $890/st on the week as lead times were flat at 9-10 weeks.
