US HRC: Prices fall as near term bottom eyed

US hot rolled coil (HRC) prices fell this week as the market eyes a near-term bottom even as a potential automotive strike looms.

The Argus weekly domestic US HRC Midwest and southern assessments fell by $30/short ton (st) to $720/st ex-works. HRC prices have dropped by 40pc since the peak of $1,200/st in April to their lowest since early-January.

The United Auto Workers (UAW) has traded barbs with the Big 3 automakers — Ford, General Motors and Stellantis — with the UAW filing unfair labor practice charges against the latter two last week.

The current contract expires on 14 September.

Large tonnage discounts for transactions of 5,000-25,000st or more appear to be shrinking, with one mill noting that potential customers fishing for prices are bidding at $660-670/st compared to $640/st a week ago. The seller noted that they are uninterested in selling at those levels. Those transactions are outside of the Argus methodology of spot transactions between 100-1,000st.

Sub-100st offers were reported from buyers between $760-780/st for 20-60st of material.

Steel mills are trying to tighten their prices as tight inventories could lead to more buying and discussions continue in the market that mills are approaching their scrap conversion costs.

One buyer noted that scrap remains elevated compared to when steel prices hit the bottom of $628/st in November 2022. Argus' prime scrap prices are $105/st higher than at that time while HRC prices are $92/st higher.

Seven mills reportedly cancelled August scrap orders, mostly of prime scrap. Prime prices for the September trade are expected to fall by $20-30/gross ton (gt) while shred is expected to be flat while heavy melt scrap (HMS) prices could rise by $10-20/gt.

Repeatable HRC offers were between $700-750/st, with one mill saying it had sold spot HRC in that range. Many buyers were willing to bid at $700/st given uncertainty of where demand will go.

The weekly Argus US HRC Midwest lead time average was flat at 4-5 weeks, with upcoming outages having little impact on lead times.

The weekly Argus US HRC import price was flat at $700/st on a ddp Houston basis, with foreign prices remaining flat as lower US prices continue to frustrate foreign steelmaker's attempts to compete.

Plate

The Argus weekly domestic US ex-works plate assessment dropped by $55/st to $1,515/st, its first decline since 18 April after electric arc furnace steelmaker Nucor dropped its plate prices and buyers reported even lower prices.

Nucor lowered its discrete plate prices by $40/st on 31 August.

Repeatable offers were reported between $1,500-1,530/st, with the large plate producers Cleveland-Cliffs, Nucor and SSAB all reported at that level.

Smaller plate producers Evraz and JSW were said to be offering plate at even lower prices.

Despite the drop in prices plate remains at a $795/st premium to HRC Midwest ex-works prices, continuing a historically wide spread between the two products.

Lead times fell to 4-5 weeks from 5-6 weeks as mills struggled to fill up their October order books.

The Argus US delivered plate assessment also dropped by $55/st to $1,555/st.