US HRC: Prices rise as supply crunch continues

US hot-rolled coil (HRC) prices continued to increase as demand remained elevated despite historically high pricing levels and persistent auto production stoppages related to semiconductor shortages.

The Argus weekly domestic US HRC Midwest assessment rose by $64.25/short ton (st) to $1,460/st ex-works. Lead times shrank to 6-8 weeks from 6-9 weeks.

The Argus weekly domestic US HRC south assessment pulled into parity with the Midwest, increasing by $73.25/st to $1,460/st.

One large service center voiced increasing skepticism over the lack of spot tons offered by mills, especially as North American automakers continue to curtail production due to a lack of semiconductors.

Some stamping plants are reportedly operating at 50pc capacity due to the cutbacks.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices rose by 7.2pc to $957.77/st from $893.52/st the week before. The spread is more than four times higher than a year ago, when it was $227.45/st.

The domestic US cold-rolled coil (CRC) assessment increased by $15/st to $1,615/st, while the hot-dipped galvanized (HDG) assessment increased by $21.50/st to $1,621.50/st. Sources reported strong resistance from HDG customers to offers above $1,600/st. Lead times for CRC fell to 9-10 weeks from 9-11 weeks, while HDG lead times fell to 10-11 weeks from 11-12 weeks. Spot supply remained limited in the US.

The CME HRC Midwest futures market continued to rise, though at slower rates than the prior week, pushing contango out through September, indicating that some believe the market will remain elevated through the third quarter. For June, prices rose by $43/st to $1,515/st, while July prices jumped by $51/st to $1,505/st. August futures increased by $51/st to $1,485/st, while September futures pricing rose by $50/st to $1,445/st. October pricing jumped by $75/st to $1,410/st.

HRC import prices into Houston jumped by $87/st to $1,322/st ddp as global prices continued to rise.

Plate

The Argus weekly domestic US plate assessment rose by $28/st to $1,268/st as Nucor and SSAB both came out with price increases, while lead times shortened to seven weeks from 7-8 weeks.