US HRC: Prices jump on thin supply

US hot-rolled coil (HRC) spot prices made another leap upwards on Tuesday as higher demand continued to create tight supply.

The Argus weekly domestic US HRC assessment rose by $45/short ton (st) to $585/st ex-works Midwest while lead times shifted downward to 8-9 weeks from 8-10 weeks in the prior week.

Mill availability wass limited if not nonexistent for October, market participants said. One mill indicated they will wait as long as they can to start booking November tons to take advantage of the increasing prices.

The spot price for HRC has risen by 30pc since 11 August, when it hit a yearly low of $450/st.

Yesterday integrated steelmaker US Steel led the market with a $60/st price increase, targeting minimum prices of $600/st for HRC, and $800/st for cold-rolled coil (CRC) and hot-dipped galvanized (HDG) products.

Integrated Canadian steelmaker Algoma Steel followed today with a $50/st price increase on HRC and CRC, and ArcelorMittal was said to have set a price floor of $600/st for HRC.

More market participants now believe that the supply tightness coupled with upcoming scheduled outages will help support prices through the rest of the year.

Some parts of the market have shown signs of weakening, with US auto production rate falling in August for the first time since February, before the Covid-19 pandemic forced state governments in the US to close large parts of the economy to try to stem the spread of the disease.

The seasonally adjusted annual rate of light trucks production in August fell by 5.7pc compared to July to 8.49mn vehicles, while car production fell by 6.4pc to 2.49mn vehicles.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices was $326.07/st, up by 15pc compared to the prior week. The spread was 2.3pc lower than the $333.86/st recorded a year ago.

The domestic US CRC assessment increased by $40/st to $760/st, while the hot-dipped galvanized (HDG) coil assessment increased by $50/st to $790/st. Lead times for CRC held at 9-11 weeks, while HDG lead times increased to 10-12 weeks from 9-12 weeks as automotive demand, low imports and a continued outage at the galvanized line at Arkansas-based electric arc furnace (EAF) steelmaker Big River Steel tightened HDG supply.

HRC import prices into Houston rose by $40/st to $520/st ddp.

Futures prices in the CME HRC futures market continued upward over the last week. October HRC futures jumped by $20/st to $585/st, while November futures rose by $24/st to $590/st. December prices increased by $21/st to $590/st, while January HRC futures rose by $21/st to $591/st. February prices rose by $23/st to $593/st, while March prices increased by $10/st to $580/st.

Plate

The Argus weekly domestic US plate assessment rose by $5/st to $585/st as a price increase announced last week by multiple steelmakers started to move through the market. Electric arc furnace (EAF) steelmaker Nucor is targeting a spot price minimum of $590/st.