US HRC: Prices continue to rise

US hot-rolled coil (HRC) prices continued to increase this week as mills aimed for higher prices in January amid increasingly limited supply.

The Argus weekly domestic US HRC index rose by $50/short ton (st) to $870/st ex-works Midwest this week. Lead times were flat at 8-9 weeks. The spot price is the highest since early-September 2018 and was up by 93pc since a yearly low of $450/st recorded in mid-August.

One service center bought 1,000st of HRC from a electric arc furnace (EAF) minimill for $850/st for January. Another buyer purchased a 210st order for $900/st for early February.

EAF minimill steelmaker Nucor was said to be targeting $960/st at its Berkeley mill in South Carolina, according to market sources.

Many market participants have complained about being unable to find spot steel, as most mills are out of availability in January and have yet to open up their February books. Service centers that would normally trade among themselves have little steel to meet new orders, let alone to sell to other service centers.

More market participants warned that a lack of steel could halt some manufacturing in the next few weeks. Many expect mill shutdowns because of the back-to-back three day weekends caused by Christmas and New Years to slow steel production and deliveries in the last two weeks of 2020.

The ferrous scrap trade in the US has seen most #1 busheling delivered US Midwest prices increasing by $70-80/gross ton (gt) or more, with most expected to settle today.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices was $606.61/st, 9pc higher than the spread of $556.61/st from the week before and 81pc higher than the $334.34/st recorded a year ago.

The domestic US cold-rolled coil (CRC) assessment rose by $30/st to $1,000/st ex-works, and the hot-dipped galvanized (HDG) coil assessment increased by $40/st to $1,010/st. Lead times for CRC and HDG fell to 8-9 weeks from 10-12 weeks as mills held off opening their February books.

HRC import prices into Houston were flat at $800/st ddp.

The CME HRC futures market mostly posted gains in the last week, with January futures jumping up by $63/st to $904/st and February prices increasing by $69/st to $890/st. March prices slipped by $61/st to $860/st, while April prices rose by $60/st to $830/st. May futures prices rose by $54/st to $800/st, while June prices increased by $40/st to $778/st.

Plate

The Argus weekly domestic US plate assessment rose by $15/st to $785/st on the week as lead times grew to 8-9 weeks from 6-8 weeks.