US domestic HRC and CRC price ranges may have firmed in the past week, sources note, adding that while prices are still rising, the pace of the upticks has slowed down significantly. This week, the most commonly heard spot market price transaction range for US domestic HRC is being heard at $95-$96 cwt. ($2,094-$2,116/mt or $1,900-$1,920/nt), FOB mill, against a range of $94-$96 cwt. ($2,072-$2,116/mt or $1,880-$1,920/nt), FOB mill, a week ago.
US CRC prices have firmed by a similar margin and are now being heard at $105-$106 cwt. ($2,135-$2,337/mt or $2,100-$2,120/nt), FOB mill, against a range of against a range of $104-$106 cwt. ($2,293-$2,337/nt or $2,080-$2,020/nt), FOB mill, a week ago.
Offshore offers, buyers note, are still “leaps and bounds” cheaper than ex-mill pricing. Similar to last week, traders are still offering US import HRC from Korea, Turkey, Vietnam, Serbia and Egypt at roughly $80 cwt. ($1,764/mt or $1,600/nt) or below, DDP loaded truck in US Gulf coast ports. HRC is also still being offered from Mexico, at slightly higher prices, although lead times are significantly shorter. Additionally, pricing for import CRC from Taiwan is still “roughly $15 cwt. ($331/mt or $300/nt) less than US domestic pricing.
Earlier this week, speaking at Steel Market Update’s 2021 Steel Summit, CRU Principal Analyst Josh Spoores said that he believes US steel prices are “peaking over the top of the post-pandemic pricing bell curve,” adding that there is an enormous amount of on-order material that will be delivered within the next few months as imports start to arrive.
“As supply tightness eases, prices will fall back. I think we’re pretty close to that now,” he continued, adding that a significant amount of capacity at three new EAFs are coming online in the next few months. Mexico, he noted, also has two new hot strip lines coming online in the not-too-distant future.
Spoores’ counterpart in the speaking session was John Anton, Chief US Economist at IHS Markit. Anton also believes that prices are bound to come down.
“This is not the new normal. Bubbles pop. They always do,” he said. “The highest price for HRC before this was in 2008 when 5 cyclones train-tracked through the Australian [iron] ore fields and it disrupted steel production for the entire planet. HRC went to a then-insane $50 cwt. ($1,100/mt or $998/nt). We broke $91 cwt. ($2,000/mt or $1,814/nt) recently. There has not been a meteor storm that’s knocked out steel mills, we haven’t had cyclones, there hasn’t been a fundamental change to the amount of capacity globally. Demand [during the pandemic] fell but it came back. Supply fell and it came back slowly. The supply side will get better and we’ll see prices adjust.