US HRC: Prices flat, buyers grow skeptical

US domestic hot rolled coil (HRC) spot prices were flat this week, breaking six weeks of rises as mills issued no new formal price increases and buyers started to examine their order books.

The Argus weekly domestic US HRC Midwest and southern assessments were flat at $1,150/short ton (st).

A mill reported selling HRC at 1,150/st in the last week. Mills were said to be targeting mostly $1,200/st for HRC, with most offers listed in the $1,150-1,200/st range.

HRC prices remain up by 83pc since late-November, when they bottomed out around $630/st.

Integrated steelmaker Cleveland-Cliffs' announced a $100/st price increase from 13 March, which brought its minimum HRC price to $1,200/st, but Argus has not heard of any sales at that level. Electric arc furnace (EAF) competitor Nucor was also heard to be targeting the $1,200/st price minimum as well.

HRC lead times in the Midwest were flat at 6-8 weeks, with mills said to be booked to the second week of May.

A southern mill was heard to be booked through August, a combination of the mill receiving a large pipe order, selling tons into Mexico and shipping additional tons for automotive customers, according to multiple sources.

Multiple buyers reported that they are starting to go through order books to figure out how they should approach buying over the next few months, as many are worried pricing could start to peak and fall off in the late second quarter and into the second half of the year.

Contract discounts of 5-9pc to the current Argus HRC assessment would be the equivalent of $58-104/st.

The spread between #1 busheling scrap delivered US Midwest mills and HRC dropped by 12pc from the prior week to $659/st, reflecting increased prime scrap prices from the March trade.

The spread is 4.6pc lower than a year ago, when US HRC prices were reaching their peak in March and April.

The Argus HRC import assessment into Houston rose by $60/st to $1,000/st, reflecting price indications for July/August arrivals. Few buyers are interested in imported volumes because of the extended lead times and potential price risk if domestic price decline.

The Argus weekly domestic US cold rolled coil (CRC) assessment was flat at $1,300/st, while the hot dipped galvanized (HDG) coil assessment rose by $60/st to $1,300/st.

Offer ranges for CRC and HDG were in a wide range from $1,250-1,400/st, with most between $1,300-1,400/st.

Lead times for CRC were flat at 9-10 weeks while HDG lead times were flat at 8-9 weeks.

The CME HRC Midwest futures market was down in the last week, with contango retreating a month through May. May prices fell by $40/st to $1,200/st, while June futures prices dropped by $60/st to $1,116/st. July prices fell by $35/st to $1,035/st, while August futures declined by $41/st to $980/st. September prices dropped by $58/st to $967/st.

Plate

The Argus weekly domestic US ex-works plate assessment edged up by $5/st to $1,535/st.

Lead times rose to 7-10 weeks from 7-8 weeks as May is reportedly available and some are into June.

The plate delivered assessment was flat at $1,600/st.