US HRC: Prices increase on strong demand

US mills continued their relentless push to increase hot-rolled coil (HRC) pricing toward $1,700/short ton (st), helped along by strong demand despite recovering steel production rates.

The Argus weekly domestic US HRC Midwest assessment rose by $17.25/st to $1,662.25/st ex-works. Lead times increased to 7-9 weeks from 6-9 weeks.

The Argus weekly domestic US HRC south assessment increased by $2.50/st to $1,640/st.

Spot offers were muted in the week after the Memorial Day weekend, with many service centers noting that it had become harder to find available spot tons.

The increased prices come as the US steel mill utilization rate rose above 80pc two weeks ago for the first time since the beginning of the Covid-19 pandemic in mid-March 2020. Steel mill utilization rates for the week ending 5 June were at 82.3pc.

The higher utilization rates indicated that there is more supply than before the pandemic. Coronavirus-related economic shutdowns led to tens of millions of tons of steel production being taken offline in the second quarter of 2020, with all but one blast furnace since then brought back online. A 1.65mn st/yr production expansion by Arkansas-based electric arc furnace (EAF) minimill steelmaker Big River Steel has added to available steel production. Higher crude oil prices has also led to increased demand from tube and pipe mills, which have ramped up ferrous scrap consumption over the past two months.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices slipped by less than a percent to $1,133.23/st from $1,142.77/st the week before, the first decrease since the beginning of March.

The spread is more than five times higher than a year ago, when it was $228.71/st.

Prices for #1 busheling delivered US Midwest consumer increased by $60/gross ton (gt) in the June trade.

The Argus weekly domestic US cold-rolled coil (CRC) assessment increased by $26.50/st to $1,848.50/st, while the hot-dipped galvanized (HDG) assessment rose by $27.75/st to $1,858.75/st.

Cleveland-Cliffs was said to be targeting $2,000/st for HDG products, but no sales have been confirmed at these levels.

Lead times for CRC increased to 9-11 weeks from 10 weeks, while HDG lead times rose to 11-13 weeks from 10-12 weeks.

The CME HRC Midwest futures market continued to increase compared to the prior week. For July, prices edged up by $4/st to $1,652/st, while August futures increased by $60/st to $1,630/st. September futures pricing jumped by $69/st to $1,574/st, while October pricing lept upward by $80/st to $1,480/st. November pricing rose by $67/st to $1,402/st.

HRC import prices into Houston were flat at $1,486.75/st ddp as no new trades were reported.

Plate

The Argus weekly domestic US plate assessment fell by $13.25/st to $1,469/st delivered. Lead times shrank to 5-7 weeks from 6-10 weeks.