US HRC: Prices jump on higher offers

US hot rolled coil (HRC) spot prices jumped this week as steelmakers kept prices elevated and Nucor again hiked offers.

The Argus weekly domestic US HRC Midwest assessment jumped by $44.25/short ton to $727.50/st, while the southern assessment also jumped by $59.60/st to $729.50/st.

The higher prices reflect electric arc furnace (EAF) steelmaker Nucor's $50/st price increase announcement made yesterday.

HRC lead times in the Midwest rose to 4-5 weeks from 3-4 weeks.

After a sluggish start post-New Year's holiday last week, demand has picked up moderately, reflecting lower inventory levels after the holiday season. Service centers reported higher customer inquiries and shipments, but few of them are interested in stocking up on steel products, especially with lead times not pushing out further than they have.

Buyers are concerned that pricing will see-saw more this year, leaving open the potential that they lose money on high priced inventory in future months.

The price increases are expected to hold for now, especially with scrap prices expected to increase by $50-60/gross ton (gt) for prime grades, and $30/gt for obsoletes. While much of the US scrap market has yet to settle, indications are that the increases will broadly hold.

If the January price increases are realized the spread between #1 busheling scrap delivered US Midwest mills and HRC would fall by 2.5pc to $360/st from the prior week.

A year ago the spread was $1,071/st as HRC prices were plunging from record-high levels.

It will mark the second consecutive month that scrap prices have risen, helping to continue increase raw material costs for steelmakers that they are hoping to pass on to their customers.

The Argus iron ore fines 62pc Fe cfr Qingdao assessment has increased by 54pc since hitting a low at the end of October, with pricing at $122/metric tonne on Tuesday.

The Argus HRC import assessment into Houston was flat at $690/st ddp. Few import numbers were reported as prices remain unattractive, especially as foreign prices continue to rise.

The Argus weekly domestic US cold-rolled coil (CRC) assessment increased by $39/st to $944/st, while the hot dipped galvanized (HDG) coil assessment rose by $30.75/st to $935.75/st.

Lead times for CRC were flat at 5-6 weeks while HDG lead times were flat at six weeks.

The CME HRC Midwest futures market was down in the last week, remaining in contango. February prices fell by $12/st to $778/st, while March prices were flat at $800/st. April prices fell by $7/st to $810/st, while May prices moved down by $5/st to $815/st. June prices fell by $12/st to $815/st, and July prices dropped by $14/st to $815/st.

Plate

The Argus weekly domestic US ex-works plate assessment edged up by $1.50/st to $1,456.50/st.

Lead times rose to five weeks from 3-4 weeks.

The plate delivered assessment rose by $6/st to $1,511/st.