US HRC: Prices jump as mills again hike prices

US domestic hot rolled coil (HRC) spot prices continued to increase this week as mills again pushed offer prices higher, stoking increased skepticism from buyers after a fresh round of mill price increases this morning.

The Argus weekly domestic US HRC Midwest and southern assessments both rose by $50/st to $900/st on Tuesday.

Steel mills continued to be successful in achieving higher flat steel spot offers after formally raising prices by $260/st through a series of increases since the end of November through early last week. The US Midwest spot assessment has increased by more than $270/st since then.

This morning electric arc furnace (EAF) steelmaker Nucor led the latest round of increases, jumping prices up $100/st to an HRC price minimum of $1,000/st. Integrated steelmaker and competitor Cleveland-Cliffs shortly followed on both counts, while US Steel announced its own $100/st price increase without setting a minimum.

The latest hike, if accepted by buyers, would bring the HRC market to the $1,000/st mark for the first time since 28 June 2022. At that time steel prices were falling after being boosted in March and April as raw material supply uncertainty gripped the US market.

Multiple service center contacts were apoplectic about Nucor's price announcement, with one describing it as "ridiculous," another calling the move "ambitious," and one saying the Nucor's action "smacks the market hard."

Offers were reported in a wide range between $800-940/st, while most were in the $900/st range.

One buyer reported buying multiple orders of HRC of a couple thousand tons each at $800/st late last week, falling outside of Argus' HRC methodology. Another service center inquired on a few thousand tons for second quarter delivery and received price offers between $800-900/st.

Those prices are between 10-20pc lower than the targeted spot price, and flat to 13pc lower than the Argus spot assessment.

In the last 20 days US steelmakers have increased prices by $200/st, pointing to increasing raw material prices and extending lead times--points many buyers believe are overblown.

HRC lead times in the Midwest rose to 6-7 weeks from 4-8 weeks, with March appearing to be booked and most mills said to be looking at the first week of April.

Internationally, the Argus iron ore fines 62pc Fe cfr Qingdao assessment rose to $132/dry metric tonne on Tuesday, the highest level since June 2022.

The spread between #1 busheling scrap delivered US Midwest mills and HRC increased by 11pc from the prior week to $500/st and is at the highest level since June 2022, when HRC prices were plunging from a conflict-influenced price spike.

A year ago the spread was $583/st and was bottoming out prior to the conflict in Europe.

Contract discounts of 5-9pc to the current HRC assessment would be the equivalent of $45-81/st.

The Argus HRC import assessment into Houston fell by $20/st on reported pricing out of Mexico. Long lead times from non-North American countries and elevated prices continue to keep imports at bay for now.

The Argus weekly domestic US cold-rolled coil (CRC) assessment jumped by $60/st to $1,060/st as it remains the tightest market, while hot dipped galvanized (HDG) coil assessments rose by $20/st to $1,020/st.

Lead times for CRC edged up by 8-9 weeks from 8 weeks while HDG lead times increased slightly to 7-8 weeks from 6-8 weeks.

The CME HRC Midwest futures market was up again in the last week, pushing up by double digits across the board though falling into backwardation from June onward, a month earlier than last week and indicating that there is not much sentiment for this run lasting into the second half of the year. April prices rose by $30/st to $905/st, while May prices jumped by $36/st to $906/s. June jumped by $36/st to $886/st, while July prices moved up by $20/st to $860/st. August futures rose by $14/st to $844/st, while September prices increased by $17/st to $839/st.

Plate

The Argus weekly domestic US ex-works plate assessment was flat at $1,480/st, the current target price for Nucor that was reinforced last Thursday. Some possible offers as low as $1,440/st were reported.

Lead times slipped slightly to six weeks from 6-7 weeks.

The plate delivered assessment was also flat at $1,510/st.