US HRC: Prices rise, buyers stay on contracts

US hot rolled coil (HRC) spot prices continued to rise for a third consecutive week as steelmakers hiked their spot offer prices and many buyers tried to keep their purchases to their contracts.

The Argus weekly domestic US HRC Midwest assessment increased by $31.25/st to $781.25/st, while the southern assessment rose by $21.25/st to $771.25/st.

The Midwest assessment has risen by 25pc since hitting a bottom of $628/st on 29 November, while the southern assessment has risen by 23pc in the same time period.

The higher prices reflect US steelmaker's continuing push last week to increase prices, with integrated steelmaker Cleveland-Cliffs raising prices by $50/st on 17 January to an $800/st minimum pricing for HRC and Nucor following later in the week. Alabama re-roller AM/NS Calvert also followed with a $50/st price increase.

HRC price offers ranged from $720-800/st in the Midwest, with most between $750-800/st. In the south prices are broadly similar though lower offers dragged its number down.

Service centers are trying to reap the benefits of higher contract discounts, which range from 5-9pc this year and would account for discounts of $39-70/st to the Argus US Midwest HRC assessment and even more from the top line of mill offer levels.

HRC lead times in the Midwest rose to 5-6 weeks from 4-6 weeks, reflecting increasing supply tightness. Some buyers reported that a handful of mills still have HRC available in late-February. Demand continues to remain steady and some service centers are concerned that customers may have pulled future demand forward as they work to get ahead of rising steel prices.

The main focus for service centers continues to be inventory management with many concerned the market will sour in the coming months.

The spread between #1 busheling scrap delivered US Midwest mills and HRC rose by 8.3pc to $408/st from the prior week.

A year ago the spread was $990/st as HRC prices were set to continue falling from record-high levels in late-2021.

The Argus HRC import assessment into Houston rose by $27.50/st to $717.50/st ddp on higher offers. Asian markets remained quiet because of the Lunar New Year celebrations, with many expecting those countries to increase prices next week when they return from the holiday.

The Argus weekly domestic US cold-rolled coil (CRC) assessment increased by $34.75/st to $992.25/st, while the hot dipped galvanized (HDG) coil assessment rose by $13/st to $973.25/st.

Lead times for CRC rose to 7 weeks from 6-7 weeks while HDG lead times fell to six weeks from seven weeks. Galvanized material was said to be available, with multiple sources reporting mills were looking to book additional HDG tons while spurning adding HRC to their books.

The CME HRC Midwest futures market was down by double digits in the last week, While prices remained in contango their spread has narrowed significantly. March prices fell by $14/st to $779/st, while April prices dropped by $24/st to $787/st. May prices dropped by $32/st to $787/st while June fell by $25/st to $790/st. July prices dropped by $34/st to $791/st, while the August futures price fell by $32/st to $793/st.

Plate

The Argus weekly domestic US ex-works plate assessment was flat at $1,464/st as the market attempted to figure out what SSAB's $60/st price increase last week meant for pricing.

Lead times rose to 5-6 weeks from 4-5 weeks.

The plate delivered was flat at $1,506/st.