US HRC: Prices fall as mill hikes falter

US hot rolled coil (HRC) prices resumed falling today as mill hikes announced two weeks ago failed to stick.

The Argus weekly domestic US HRC Midwest and southern assessments both dropped by $60/short ton (st) today to $820/st on an ex-works basis, down by 32pc since the peak of $1,200/st in April.

Multiple sources reported repeatable offers between $800-860/st for 500st of HRC, with most between $820-860/st.

Mills continue to say they were quoting at $900-950/st, though no buyers said they had been offered those prices nor that they would entertain them.

Relatively short HRC lead times kept many buyers from purchasing large amounts of steel in the two weeks since steel mills started raising prices and setting HRC price minimums between $900-950/st.

The weekly Argus US HRC lead time average edged up to 3-4 weeks from 2-4 weeks as mill order books moved into mid- to late-July.

While a couple of buyers have reported making larger purchases of tens of thousands of tons in the past two weeks, most others who would normally make bigger buys if the market was hitting the bottom of the price curve have not done so.

Some expected the price increases to pull customers off the sidelines after months of reduced purchasing, but other service centers reported further reduced buying with one saying inquiries from their customers have "slowed dramatically" with one RV customer's business down 75pc year-over-year.

Another service center described buyers as reluctant to enter the market. While in previous market turns where demand would be pulled forward three to four months, the buyer said "I'm not hearing that happened."

One mill reported they had begun seeing signs of increased inquiries but added "it is not a surge."

The weekly Argus US HRC import price was flat at $700/st on a ddp Houston basis. While inquiries for imported HRC are reported to have increased, uncertainty in the US over whether domestic mill price increases would stick has created left most remaining on the sidelines. Some offers for September and October delivery were heard between $700-760/st ddp Houston from South Korea. A volume of flat steel was said to have been sold from Europe in the past few weeks and is expected to start arriving in mid-July.

Plate

The Argus weekly domestic US ex-works plate assessment remained flat at $1,570/st as the market remained quiet and waited for Nucor to make its next plate price announcement.

Lead times moved down to 5-6 weeks from 6-7 weeks.

The Argus US delivered plate assessment increased by $10/st to $1,610/st.