US HRC: Prices drop on lower sales, offers

US hot rolled coil (HRC) prices fell for a third week as mills were forced to cut prices to try to entice buyers.

The Argus weekly domestic US HRC Midwest and southern assessments fell by $35/short ton (st) to $1,100/st. Prices were down by 8.3pc from their peak of $1,200/st in early April.

In the Midwest and South, there remained offers as high as $1,200/st for single truckloads, but most competitive offers were noticeably lower at $1,100-$1,140/st. A Midwest mill had offered as low as $1,000/st but believed they would need to "sharpen their pencil" as they work on June pricing.

A second Midwest mill indicated it had sold at $1,100/st compared to $1,150-1,170 the week before. Demand was still good, according to the mill, but service centers were trying to "tap the brakes" as concern grows around pricing direction.

Buyers were surprised by the resilience in HRC pricing, which has been a minimum of $1,100/st, since the beginning of March but expected further pressure.

"It's definitely coming, not going to lie I thought the erosion would've started a lot quicker," one buyer said.

The calendar continued to catch up with lead times as mill orderbooks have stalled for June production. US HRC lead times shrunk to 5-6 weeks as mills from 6-7 weeks previously, according to the latest Argus average data. Lead times are down from a peak of 8-10 weeks at the end of March.

Market discussions around larger tonnage transactions at significantly discounted prices started to subside with most buyers saying no one in the market to make such a buy.

The weaker spot prices appeared to be mostly priced into the CME US HRC forward curve as it ticked up by $4/st for June with limited additional sell off through November 2023.

Import prices were flat this week at $840/st on a DDP Houston basis based on offers from South Korea. Buyers showed limited interest as the longer delivery times were transitioning into September arrival. Importers are running out of time to book vessels, with one saying that "maybe this month or early next month is the almost deadline for steel" imports to be ordered before imports start hitting buyers' books at the end of the year.

Plate

The Argus weekly domestic US ex-works plate assessment was flat at $1,570/st, matching offer published levels from integrated steelmaker Cleveland-Cliffs and electric arc furnace (EAF) steelmaker Nucor.

Lead times extended to 6-9 weeks, with Cliffs still said to have June available while Nucor and competitor SSAB are said to be booking July tons.

The Argus US plate assessment was flat at $1,660/st on a delivered basis as market activity remained minimal.