US sheet steel prices have climbed again week-over-week, and sources close to SteelOrbis say they’re wondering how long this nearly year-long uptrend will last.
This week, SteelOrbis sources note that US HRC prices are being heard at $91-$94+ ($2,006-$2,072/mt or $1,820-$1,880/nt), FOB mill, against a range of $90-$94 cwt. ($1,984-$2,072/mt or $1,800-$1,880/nt), FOB mill, a week ago.
CRC prices, however, have stabilized, and are still being heard at $100-$102 cwt. ($2,205-$2,249/mt or $2,000-$2,040/nt), FOB mill, today.
“We’re not sure if this is a temporary pause or if we’re at or close to the peak of the market,” a source said, adding that predictions as to where hot rolled coil prices will peak are “extremely varied.” Some think the HRC market will peak at $95 cwt. ($2,094/mt or $1,900/nt); others think it will climb above $100 cwt. ($2,205/mt or $2,000/nt). But sources say “it’s anyone’s guess at this point.”
A second factor impacting the flats trend may be linked to import tonnages. For example, recent preliminary census data from the US Department of Commerce show the US imported 310,865 mt of hot rolled sheet and strip in June, which would reflect a more than 100,000 mt jump from May, when the US imported 210,159 mt. Preliminary data also suggest that US import CRC tonnages are up by about 20%, month-over-month, from 112,229 mt in May to 134,535 mt in June.
Trader sources have said they believe that import tons in July and August will be higher.
Also of note is the still-anticipated drop in scrap prices during next month’s buy cycle. As of yesterday, the most commonly heard expectation was that HMS, P&S and shredded scrap will soften by $20-$30/gt. Last week, a scrap market source told SteelOrbis that he believed that any softening in scrap prices would create an immediate drop in new steel sales value, adding that record quarterly earnings reports from mills coupled with trying to take scrap prices down wouldn’t “play well” with steel buyers.
On the other hand, demand is still robust, spot market tons are scarce, and sheet buyers say they’re having a hard time getting their hands on the tonnages they need.
“It’s hard to predict or make sense of the market,” a source concluded. “Prices have been climbing, consistently, for the past year, and no one expected that would happen. At this point, I don’t think anyone can accurately call where the elevator is going to stop.”