US HRC: Lower offers drag prices down

US hot rolled coil (HRC) prices continued to fall for a third week as buyers reported offers below $1,400/short ton (st) and lead times remained short.

The Argus weekly domestic US HRC Midwest and southern assessments both fell by $28.50/short ton (st) to $1,421.50/st. HRC prices have fallen by 5.2pc since hitting their peak of $1,500/st between 5-19 April.

HRC lead times in the Midwest fell to 3-4 weeks from 4-5 weeks, with flat-rolled steel mills reported to be in the first week of June.

One mill reported selling in a range from $1,450/st to $1,500/st. Multiple sources said offers of $1,380/st were available for spot HRC, with most offers around $1,400/st and some between $1,450-1,500/st.

Buyers have restricted their purchases on an as-needed basis, and many reported declines in inquiries. Demand was said to broadly be steady.

The US ferrous scrap market traded broadly down by $75/gross ton (gt) in the May trade, with #1 busheling erasing its gains from April.

The steel mill that reported pricing between $1,450-1,500 said declining scrap pricing would likely lead to falls in its HRC prices, possibly down to the $1,425/st range.

The Argus HRC import assessment into Houston plummeted by $335/st to $1,125/st ddp, the largest price swing in at least three-and-a-half years as European import sales and offers into the US began to materialize.

One Midwest service center reported buying some European HRC into the US at $1,060/st ddp Burns Harbor, Indiana, for July delivery. Another service center reported getting offered French HRC into Houston at $1,100/st ddp for August.

The Argus HRC ex-works Northwest Europe assessment has declined by 22pc since hitting a peak of $1,409/st in late-March down to $1,099/st on 10 May. The European automotive industry has recently dealt with significant supply issues, lowering steel demand.

Multiple market participants dismissed the impact European imports will have on the US market, pointing to the quota system in place that limits the volumes from each individual EU country by product.

Other import offers, broadly from countries with the 25pc Section 232 tariffs, were reported in the $1,300-1,500/st range.

The spread between pig iron cfr New Orleans and #1 busheling delivered US Midwest consumer fell by 20pc to $185/st.

The spread between #1 busheling scrap delivered US Midwest mills and HRC selling prices fell by 3.7pc to $745/st. A year ago the spread was $1,004/st, when the US market was becoming superheated amid supply-side issues.

The spread between pig iron cfr New Orleans and Midwest and southern HRC prices increased by 3.1pc to $560/st as a drop in pig iron prices outweighed HRC declines.

The Argus weekly domestic US cold-rolled coil (CRC) assessment fell by $25/st to $1,825/st, while the hot dipped galvanized (HDG) coil assessment declined by $35/st to $1,815/st.

Price offers for CRC were said to be as low as $1,800/st, while HDG offers were down to $1,760/st.

Lead times for CRC fell to 5-7 weeks from 6-7 weeks while HDG lead times fell to 5-6 weeks from 6-7 weeks.

The CME HRC Midwest futures market broadly moved down in the last week as market sentiment weakened after stabilizing in the prior week. June pricing moved down by $30/st to $1,205/st, while July future pricing fell by $75/st to $1,115/st. August futures declined by $47/st to $1,098/st, and September futures moved down by $16/st to $1,094/st. October futures fell by $31/st to $1,079/st, while November pricing edged up by $8/st to $1,060/st.

Plate

The Argus weekly domestic US ex-works plate assessment declined by $8/st to $1,897/st, as most plate makers kept their price offers for June flat at $1,910/st and low offers of $1,840/st dragged prices down.

A $50/st price increase for July tons announced by SSAB Americas yesterday had reportedly thrown the plate market into some disarray, with service centers and mills alike confused as to where the company is now pricing plate at. SSAB Americas also has a raw material surcharge (RMS) that is placed on top of the current price, if certain pricing conditions are met. The RMS for July will be reassessed in mid-June.

The plate delivered assessment fell by $55/st to $1,952/st. Lead times edged down to 5-7 weeks from 5-8 weeks.