With news that October US domestic scrap prices are likely to settle between $30-$40/gt ($30-$42/mt) below September settled prices, it’s expected that US HRC prices will face additional downward pressure.
Current prices have fallen week-over-week, from $27-$28 cwt. ($595-$617/mt or $540-$560/nt), ex-mill, to an average of $26 cwt. ($573/mt or $520/nt), ex-mill. Some sources have reported that deals slightly below this range are already available.
“I think there is more room for the market to come down, absolutely. The market is weak and it’s our sense that everyone is in fear mode,” a source said. “The best we can do is batten down the hatches and try to weather the storm.”
Another source agreed.
“Inventories are healthy, and no one is under any pressure to buy,” he said. “I absolutely think that more adjustments are on the way.”
Last week, SteelOrbis’ expectation was that US HRC prices were expected to settle between $24-$26 cwt. ($529-$573/mt or $480-$520/nt), ex-mill, before the end of the year. However, with the larger-than-expected decline in this months’ scrap prices, it’s believed that US HRC will settle toward the lower end of the previously forecast range.