US HRC: Mills fail to increase sales price

US hot-rolled coil (HRC) prices were flat this week for the first time in a month as mills failed to secure the higher prices they pushed for last week.

The Argus US HRC Midwest and southern assessments were flat from the prior week at $900/short ton (st) ex-works. They remain up by $240/st or 34pc from September lows. Prices are 25pc lower than 2023 peak of $1,200/st in April.

Sales and purchases were reported at $900/st for a few hundred short tons up to 1,000st.

Last week electric arc furnace (EAF) steelmaker Nucor and integrated competitor US Steel both increased their minimum HRC prices to $950/st after their competing steelmaker Cleveland-Cliffs raised its minimum HRC prices to $1,000/st.

Buyers were skeptical at Cliffs' move, which represented a $100/st increase over their last price minimum, and generally were more supportive of Nucor and US Steel's lower offer levels.

Multiple contacts did call into question the decision by the two steelmakers to only increase prices by $50/st from their prior levels and not match Cliffs' price.

Resale prices are rising, though not at the same rate as mill announcements. Many service centers report that some of their cheapest material is coming in right now or in the coming weeks, a result of large purchases made a month or two ago and cheaper contract tons.

More contracts have been locked up in the last few weeks, allowing some service centers to begin evaluating their contract volumes for January. Most believe they will wrap up their remaining contracts in the next few weeks.

While many reported their terms being rolled over from 2023, some noted resistance from multiple steelmakers who pushed for lower discounts. In 2023, many were able to secure discount ranges of 5-9pc, much higher than the typical range of 2-3pc, while some could face lower discounts for 2024.

Lead times stalled in the last week as mills broadly continue to be no quoting January tons. The Argus weekly assessed lead times dropped to 7.6 weeks from 8.7 weeks.

More buyers have discussed being interested in imports, with some locking up tonnages for the first quarter.

The possibility of an influx of imports has worried some, though the options to source foreign steel is relatively limited with 25pc Section 232 tariffs still applying to most of the world.

The Argus HRC import assessment rose by $34/st to $820/st ddp Houston on higher South Korean and Vietnam offers.

Plate

The Argus US plate assessment fell by $25/st to $1,335/st ex-works as offer prices fell amid lower buying.

Service centers reported that they are working to keep their inventories low coming into the end of the year and amid a depressed price environment. Nucor's $140/st price drop two weeks ago continues to reverberate across the market, with more declines expected.

Tight inventories could lead to a whiplash in pricing at the beginning of the year, depending on when service centers return to buying, one market contact said.

First quarter import prices are reported to be between $1,000-1,100/st ddp Houston, with the possibility of $1/st of freight if its shipped upriver. The Houston market has been noted as particularly competitive.

Even those lower import numbers are hard for buyers to make work as domestic steelmakers have shown willingness to sharply drop pricing. Import pricing only has a $235-335/st discount for import to domestic prices and a lead time of February at the earliest. Material from South Korea is reportedly expected to arrive in April.

Lead times edged down to 4.8 weeks from 4.9 weeks as mills remain into mid-December.

Delivered plate pricing moved down with the ex-works decline by $25/st to $1,368/st.