US HRC: Prices hike on low supply in January

US hot-rolled coil (HRC) prices continued to rise as many look toward limited supply in January and mills hold off on opening their books.

The Argus weekly domestic US HRC index rose by $25/short ton (st) to $735/st ex-works Midwest this week, while lead times fell for the first time in weeks, down to 7-8 weeks from 8-10 weeks. The spot price is the highest since March 2019.

Lead times fell because many mills have not yet opened up their January books for orders, though market participants believe some mills will have limited or no spot availability for the month due to limited supply and contract obligations.

Spot pricing for January is in a range of $720-760/st, with some thinking prices could go higher. One market participant said if there were 100,000st of steel available, they would buy it, but they are having to settle for a couple thousand short tons at a time.

Integrated steelmaker US Steel's chief executive David Burritt said in an interview last week with Argus that his company will reopen idled blast furnaces as customer demand requires it, but that no such demand has materialized. US Steel has one blast furnace each idled at its Gary Works in Indiana and Granite City Works in southern Illinois.

ArcelorMittal has a blast furnace idled at its Cleveland mill, but market participants do not expect that to be restarted prior to the company selling the facility, along with most of its US footprint, to integrated steelmaker Cleveland-Cliffs.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices was $471.61/st, 6pc higher than the spread of $445.61/st from the week before and 45pc higher than the $324.71/st recorded a year ago.

The domestic US cold-rolled coil (CRC) assessment rose by $6.25/st to $906.25/st ex-works, and the hot-dipped galvanized (HDG) coil assessment increased by $10/st to $910/st. Lead times for CRC increased to 12 weeks from 10 weeks, while HDG lead times were unmoved at 12 weeks.

HRC imports into Houston increased by $40/st to $720/st.

The CME HRC futures market continued to rise in the last week albeit at a slower rate than the week before, with December prices up by $4/st to $759/st, and January futures increasing by $3/st to $758/st. February prices also rose by $12/st to $724/st, while March prices were up by $16/st to $703/st. April prices jumped by $33/st to $681/st. May futures prices were at $677/st.

Plate

The Argus weekly domestic US plate assessment rose by $15.75/st to $695.75/st on the week as lead times increased to 8 weeks from 5-7 weeks.