US HRC: Prices continue to rise after hikes

Domestic US hot-rolled coil (HRC) spot prices continued to rise for a fourth consectuive week after mills imposed higher price minimums late last week.

The Argus weekly domestic US HRC index rose by $4/short ton (st) to $501.50/st ex-works Midwest on seven indications from sell- and buy-side sources.

Integrated steelmakers AK Steel, ArcelorMittal and US Steel increased flat-rolled steel prices by $40/st last week, pushing minimum pricing for ArcelorMittal and US Steel to $540/st.

Larger service centers indicated that larger-than-1,000st could still receive pricing below $500/st, though it seems unlikely that buyers would consider making large purchases of HRC due to declines in demand and economic uncertainty.

Expectations that prime ferrous scrap prices will increase by at least $20/gt in the June trade, which could begin as early as next week, helped buoy steelmakers increase in prices.

Lead times stayed flat at 4-5 weeks, with minimills still having availability in late-June and integrated steelmakers said to be booked into July.

Last week Kia and Volvo both closed their US-based auto plants because of supply chain issues. The closures came just weeks after both companies had reopened their plants and highlighted concerns over how quickly the North American auto industry can restart after being closed for two months.

Car rental company Hertz filed for bankruptcy last week, elevating concerns that more used cars from the cash-strapped rental industry could flow onto the market, depressing demand for new vehicles.

HRC import prices into Houston were flat at $507.50/st ddp.

Futures prices in the CME HRC futures market strengthened over the last week. July prices increased by $8/st to $535/st. August prices rose by $8/st to $538/st, and September futures prices increased by $11/st to $544/st. October and November HRC futures prices rose by $4/st each to $539/st, while December prices increased by $3/st to $539/st, respectively.

Summary of market activity heard by Argus:

• HRC, US: Tradeable value at $500/st, ex-works Midwest, according to seller
• HRC, US: Tradeable value at $500/st, ex-works Midwest, according to seller
• HRC, US: Tradeable value at $490/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $500/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $520/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $500/st, ex-works Midwest, according to buyer
• HRC, US: Tradeable value at $500/st, ex-works Midwest, according to buyer