A little more than a week ago, US flats mills announced they’d be raising base HRC prices to a minimum of $40 cwt. ($882/mt or $800/nt), effective with all new orders. Yet this week, less than 24-hours after the UAW announced they’d reached a tentative deal with Ford Motor Company, US Steel informed customers that their new base-price for hot rolled coil was rising to $45 cwt. ($992/mt or $900/nt), FOB mill.
This move largely tracks with market sources’ prior prediction that once the UAW strike ended, domestic mills would try to take HRC up to $50 cwt. ($1,102/mt or $1,000/nt), “in short order.”
Prices for HRC, CRC and HDG coil have continued to tick upward since our last report a week ago, even before USS announced their latest increase.
For example, HRC spot tons are now being heard at approximately $40 cwt. ($882/mt or $800/nt), FOB mill, against $37.50 cwt. ($826/mt or $750/nt), on Friday October 20. Both CRC and HDG prices are also up week-over-week to an average spot transaction price of $50 cwt. ($1,102/mt or $1,000/nt), against $46-$47 cwt. ($1,014-$1,036/mt or $940-$960/nt), FOB mill, seven days ago. Similar to previous weeks, deals up to $2.50 cwt. ($55/mt or $50/nt) below this week’s average spot price have been heard based on order volume.
Lead times for HRC are now trending at 8 weeks, whereas CRC and HDG lead times are being heard at approximately 10 weeks.
Similar to last week, sources continue to report that for the short-term at least, mills still have pricing power. Too-thin inventories at the start of mills’ increase announcements shook many buyers off the sidelines, all of whom were wanting to rebuild inventories either at the bottom of the market, or as close to the bottom that they could get.
“I think we’ll see another round of increases as soon as the UAW reaches agreements with General Motors and Stellantis,” a source said. “Will this help push prices up in the short term? I believe it will. Do I think that the overall state of the market is going to support higher HRC prices in the long-term? Absolutely not.”