US HRC: Midwest slips, south ticks up

US hot-rolled coil (HRC) prices aligned in the last week as the spot market remained quiet and steelmakers were generally able to keep their HRC pricing steady.

The Argus weekly domestic US HRC Midwest assessment fell by $10/short ton (st) to $1,960/st ex-works. Lead times shrank to 6-7 weeks from 6-8 weeks.

The Argus weekly domestic US HRC south assessment rose $10/st to $1,960/st.

Both price moves were in response to steel mill offers at those prices. The alignment of the two prices ended a month of Midwest HRC prices being at a premium to southern prices.

While some spot tons were reported in the market in bits and pieces, steel producers did not seem to be in a mood to negotiate while few buyers want to buy large amounts of material that does not have a home. Many buyers have worked off of contract tons, with inventory management before the end of the year a priority for most.

Taking advantage of the record price levels, multiple steelmakers have made announcements for new steel mills. Integrated steelmaker US Steel said on 17 September that it would build a 3mn st/yr flat-rolled mill in the US, while on 20 September electric arc furnace (EAF) steelmaker Nucor said it would build its own 3mn st/yr flat-rolled mill in Ohio, Pennsylvania, or West Virginia.

Australian steelmaker BlueScope announced on 21 September that it would look into building a paint and coating facility in the eastern US.

General Motors (GM) announced more automotive production cuts in North America on 16 September, continuing to

lower consumption from automotive.

HRC import prices into Houston fell by $100/st to $1,500/st ddp on a wide range of prices into Houston.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices fell by $10/st to $1,431/st from $1,441/st a week earlier, reflecting the drop in Midwest HRC pricing.

The spread is over four times as wide as the $336/st from a year ago.

The Argus weekly domestic US cold-rolled coil (CRC) assessment fell by $15/st to $2,160/st on lower prices achieved by mills. The hot-dipped galvanized (HDG) assessment rose by $30/st to $2,230/st.

Lead times for CRC were flat at 8-10 weeks while HDG lead time widened to 7-11 weeks from 10-12 weeks.

The CME HRC Midwest futures market fell across the board, with the market in severe contango through the next five months. Futures pricing dropped by $74/st to $1,710/st for November, and plunged by $130/st to $1,560/st for December. The January futures price plummeted by $151/st to $1,464/st, with February pricing falling by $129/st to $1,421/st.

Plate

The Argus weekly domestic US plate assessment increased by $10/st to $1,740/st delivered. Steelmakers and traders mostly maintained offers as the market moves toward an expected new round of price increases next week. Lead times were flat at 7-8 weeks.