US HRC: Prices continue to fall into holiday

US hot rolled coil (HRC) prices fell closer to the $600/short ton (st) mark despite market comments last week that steel mills were at or approaching their breakeven points.

The Argus weekly domestic US HRC Midwest assessment dropped by $28.75/short ton (st) to $627.75/st, while the southern assessment dropped by $25.25/st to $628.50/st.

HRC lead times in the Midwest fell to 3-4 weeks from 4 weeks.

Steel prices were at their lowest level since October 2020, when the market was beginning to rise out of the Covid-19 pandemic induced lows.

Offers were reported between $600-700/st, with most between $600-660/st. Little activity was reported in the spot market as it began to slow going into the Thanksgiving holiday.

There were few comments this week about mill breakeven points after playing a large part in the prior week's market chatter.

Market participants were expecting a fall off in demand through the rest of the year and the holiday season. Some were concerned that the first quarter may start out slow, similar to how the market began in January 2022, taking multiple weeks to develop.

Initial reads of the December scrap trade are for pricing to be close to sideways compared to November levels. The #1 busheling scrap pricing has fallen the past seven consecutive months.

A possible rail strike that would ripple across the US economy in December has become closer to a reality, with one of the largest unions voting a draft labor agreement down. A strike could grind much of the US economy to a halt, including shipments of scrap into steel mills and finished steel out of them.

The Argus HRC import assessment into Houston was flat at $610/st ddp on no import offers.

The spread between #1 busheling scrap delivered US Midwest mills and HRC fell by 7.8pc to $341/st.

A year ago the spread was $1,306/st as HRC prices were beginning to decline from record-high levels.

The Argus weekly domestic US cold-rolled coil (CRC) assessment was down by $20/st to $850/st while the hot dipped galvanized (HDG) coil assessment slipped by $6.25/st to $848.75/st.

Lead times for CRC fell to 5-7 weeks from 7 weeks while HDG dropped to 5 weeks from 6-7 weeks.

The CME HRC Midwest futures market edged up in the last week, with the futures prices remaining in contango. January prices rose by $10/st to $700/st, while February prices edged up by $3/st to $711/st. March prices rose by $8/st to $725/st, while April prices increased by $5/st to $735/st. May prices rose by $9/st to $740/st, and June prices increased by $13/st to $753/st.

Plate

The Argus weekly domestic US ex-works plate assessment fell by $5/st to $1,600/st on lower priced offers.

Lead times fell to 5-6 weeks from 6-7 weeks.

The plate delivered assessment dropped by $37.50/st to $1,650/st.