US hot-rolled coil (HRC) prices fell over the last week as the United Auto Workers (UAW) began a much-anticipated strike, weighing on prices and already resulting in some steel production cuts.
The Argus US HRC Midwest and southern assessments both fell by $20/short ton (st) to $670/st ex-works, the lowest since November 2022 and down by 44pc from the April peak.
Tradeable price levels were reported between $660-700/st, with most on the lower end of the range. Steel mill profitability was further squeezed this week, with participants noting that prices could be approaching break-even points and motivating suppliers to attempt to set a price floor.
Lead times extended to 5-6 weeks from 4-5 weeks as most steelmakers were said to be into the end of October.
Integrated steelmaker US Steel temporarily idled the remaining active 1.4mn st/yr blast furnace at its Granite City, Illinois, mill, because of the strike. The mill has two furnaces, with the other idled at the beginning of the Covid-19 pandemic.
Few participants viwed the Granite City idling as doing much to dent persistent oversupply in the market, while impacts have yet to be felt from a raft of planned steel mill outages that will take more than 1mn st of flat steel production out of the market in September and October.
The strike that began on 15 September by the UAW against Ford, General Motors (GM) and Stellantis kept many buyers out of the market as they wait to see how long the strike lasts. The strike could expand on Friday if the union feels it has not made enough progress in its negotiations with the automakers. It currently is striking against one plant for each of the Big 3, with the automaker's highest wage offer is a 21pc increase compared to the UAW's demand for a 40pc increase.
A short strike of a few weeks would likely have a minimal impact on steel pricing and consumption, while a more extended strike could lead to deeper cuts on both.
When the strike ends, many expect steelmakers to push price increases to take advantage of low service center inventories and what they believe will be a bump in demand. Steel companies are also in the midst of contract negotiation season, with many reporting steel mills dragging their feet until they can begin raising prices to give them more of a price advantage.
The HRC import ddp Houston assessment fell by $30/st to $660/st on lower offers from Brazil and South Korea. Imports were broadly uncompetitive into the US as continued price uncertainty and elevated prices keep many domestic buyers out of the import market.
Plate
The Argus US plate assessment was flat at $1,490/st ex-works as the market remained subdued as it continued to adjust after Nucor's price drop a few weeks ago.
Lower import plate prices reported from South Korea, though no purchasing was reported.
Lead times shortened to 3-6 weeks from 4-6 weeks.
Delivered plate pricing was flat at $1,530/st.
