US HRC: Prices rise as supply remains tight

US hot-rolled coil (HRC) prices continued to trend upward as supplies remain tight and demand stays elevated.

The Argus weekly domestic US HRC Midwest assessment rose by $15/st to $1,521.50/st ex-works. Lead times grew to 8-9 weeks from 7-9 weeks.

The Argus weekly domestic US HRC south assessment also increased by $15/st to $1,525/st.

Consensus grew that demand will remain elevated for much of the year, and some service centers feared that supply issues will be exacerbated by the auto industry when it returns to the market in full force.

North American auto production has been hobbled for months by global semiconductor shortages, leading to less steel being consumed by auto suppliers.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices rose by 1.5pc to $1,019.27/st from $1,004.27/st the week before. The spread was more than four times higher than a year ago, when it was $244.45/st.

The Argus weekly domestic US cold-rolled coil (CRC) assessment increased by $36.75/st to $1,700/st, while the Argus weekly hot-dipped galvanized (HDG) assessment increased by $54.25/st to $1,700/st.

Lead times for CRC fell to 9-10 weeks from 10-12 weeks, while HDG lead times fell to 8-10 weeks from 10-12 weeks.

The CME HRC Midwest futures market continued to increase for the third consecutive week, though at slower rates than the previous week. The contango expanded to June through October compared to August through September in the prior week. For June, prices rose by $82/st to $1,630/st, while July prices jumped by $105/st to $1,643/st. August futures skyrocketed by $116/st to $1,634/st, while September futures pricing also increased steeply by $140/st to $1,609/st. October pricing increased by $115/st to $1,545/st.

HRC import prices into Houston rose by $30.50/st to $1,387.50/st ddp as global prices continued to rise. Global prices have continued to rise alongside raw material costs.

Plate

The Argus weekly domestic US plate assessment rose by $8/st to $1,300/st, while lead times went to eight weeks from 7-9 weeks. Many market participants expect further price increases in the coming weeks.