US HRC: Prices edge up as steel market remains quiet

US hot-rolled coil (HRC) spot prices rose slightly this week but remained below $600/st on continued slow spot market activity.

The Argus weekly domestic US HRC index rose by $2.25/st to $597.75/st ex-works Midwest today on eight indications from buy-side and sell-side sources.

Lead times remained steady at around 5 weeks with little spot market activity to push out times.

Since peaking two weeks ago, average US HRC prices have declined on thin demand with on-and-off increases only partially regaining losses.

Market participants said prices aren't expected to rise, and many buyers are holding back buying more spot than they need with the expectation that prices will fall.

Multiple outages through the rest of the year were reported in the latest week, but it's unclear if the drop in supplies will boost prices in the later part of the year.

The CME HRC futures market for October fell by $18/st to $591/st, while HRC futures for November dropped by $22/st to $591/st. December futures fell by $20/st to $594/st. Expectations for the rest of the year are down more than $20/st compared to last week, with steel traders expecting HRC prices below $595/st through the end of the year.

US industrial production fell by 0.2pc in July from the prior month, the sharpest fall since April, Federal Reserve data showed on 15 August.

Manufacturing output, which accounts for more than two third of industrial production, fell by 0.4pc, and has fallen by more than 1.5pc since December. Output of motor vehicle and parts fell by 0.2pc.

Import prices into Houston rose $7/st to $600/st with three month lead times on continued low trading activity. Unless domestic HRC prices rise higher or the 25pc Section 232 steel tariffs change importers don't see steel imports into the US picking up any time soon.

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 $600/st ex-works Midwest, according to seller
• HRC, US: Tradeable value at $600/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $590/st ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $597.50/st ex-works Midwest, according to buyer
• 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 $600/st ex-works Midwest, according to buyer