US HRC: Spot market pressured on slow buying

US hot rolled coil (HRC) prices slipped this week as lower offers became more repeatable and buyers were apprehensive to place new orders.

The Argus weekly domestic US HRC Midwest assessment fell by $15/short ton (st) to $1,160/short ton (st), while the southern assessment fell by $10/st to $1,165/st with a minimal spread between the two regions.

The US HRC Midwest assessment fell to the low-end of a Midwest mill source's indicated selling range. The price was more competitive than another mill's reported selling prices of $1,175-1,200/st.

In the south, a mill source said they continued to hold offers flat from the prior week at $1,200/st but spot buying remained minimal. He noted a recent small-tonnage order at $1,200/st was a likely anomaly and was waiting on more significant inquiries to see what exactly the market would bear.

Most offers from buy- and sell-side sources were between $1,100-1,200/st. The prices levels were within the Argus range of 100-1,000st to be considered in the assessment.

One service center was able to negotiate prices below the more repeatable offer range for a larger HRC order of 2,000st. Still, most buyers continued to prioritize contracts as spot levels remained uncompetitive.

The softer prices coincided with domestic lead times retracting. The average Argus HRC Midwest lead times shrank to 6-7 weeks from 7-8 weeks, with mill lead times mostly stalled in the first half of June.

Weaker sentiment in the spot market was also reflected in the forward curve with the CME HRC Midwest futures market down by double digits across the board in the last week. The curve dropped by $31-44/st for all future months through 2023.

Import prices also dropped this week on lower offers out of Asia, as buyers looked for bigger discounts on the longer lead-time material. The Argus US HRC import assessment fell by $110/st to $840/st on a DDP Houston basis on the back of buying activity from South Korea. Delivery times for the material were late summer but the most competitive price levels available in the market.

US CRC and HDG

The Argus weekly domestic US cold rolled coil (CRC) fell by $25/st to $1,350/st, while the hot dipped galvanized (HDG) coil assessment dropped by $57.50/st to $1,317.50/st.

One mill was flat on the week, reporting sales prices for CRC and HDG at an average of $1,375/st, while a Midwest mill said its CRC and HDG offer range was between $1,300-1,400, with CRC in the upper half of the range and HDG in the lower half.

A service center said it made several HDG spot purchases at $1,260/st in the hundreds of tons range.

Overall offer ranges were from $1,260-1,400, with HDG reported to be the weaker of the two value-added products on lower demand and short lead times.

Lead times for both products were flat at 7-9 weeks, with lead times broadly into the second half of June and first week of July, depending on location.

Plate

The Argus weekly domestic US ex-works plate assessment fell by $30/st to $1,570/st, returning to Nucor's published price level from last week. The price was also heard to be matched by Cleveland-Cliffs. Market sources indicated higher price level expectations last week prior to the $40/st increase announcement by Nucor.

Lead times fell to 6-7 weeks from 7-9 weeks as they remained in June.

The plate delivered assessment also fell by $30/st to $1,160/st on lower reported offer levels.