US HRC: Prices slip as spot market stagnates

US hot-rolled coil (HRC) spot prices fell for the first time in a month as buyers bought limited spot market tons.

The Argus weekly domestic US HRC index rose by $11/st to $599/st ex-works Midwest today on eight indications from buy- and sell-side sources.

Lead times slipped to 4-5 weeks with no additional bookings to add to lead times, which remain around the mid-September point.

Sources said truckloads were selling for upwards of $630/st, but large tonnages of 1,000st or more could be found for less than $600/st.

Business was head to be muted, with no backlogs reported and lead times continuing to erode, having not shifted in weeks.

US Steel announced today that it is seeking to change the way it negotiates its contracts, removing its peg to CRU without a replacement. The company's new method would remove the link to the CRU price and use methods such as "transaction-by-transaction discussions and/or monthly negotiations" that "used to be a staple in our business relationships."

One service center called the move "a bomb in the market" and it was unclear how the market will react and whether other mills will follow.

On the import front, the price for HRC imports into Houston stayed steady at $593/st on low trading activity. Traders say HRC imports from Egypt, Mexico, South Korea, and Turkey still cannot compete in the US due to continued low domestic prices and high availability from domestic mills.

Cold-rolled coil (CRC) and hot-dipped galvanized (HDG) prices stayed around $770/st and $780/st, respectively. Plate prices rose around $15/st to around $760/st as mills tried to push a second $40/st price increase amid short lead times of 1-4 weeks. Sources said the plate spot market remained quiet, with some believing the second increase was meant to reinforce the first $40/st increase from 26 July.

The CME HRC futures market for September slipped by $7/st to $601/st. October prices fell by $9/st to $609/st, while HRC futures for November dropped by $7/st to $613/st. December futures are at $614/st. Steel traders expect HRC prices will be below $615/st by the end of the year.

Summary of market activity heard by Argus

• HRC, US: Tradeable value at $600/st ex-works Midwest, according to seller
• HRC, US: Tradeable value at $595/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $600/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $580/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $610/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $600/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $600/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $580/st ex-works Midwest, according to buyer