US flat rolled steel prices are still trending strong, sources note, although sentiment as to how long current price points can last is largely mixed.
“HRC pricing is crazy right now,” one source said. “Earlier this week, I met with a very large domestic buyer of HRC who thinks prices will stay strong through Q1 of next year, at least.”
A second source offered an alternative perspective. “I think the mills will try to push prices up a bit more as long as they have extended lead times,” he added. “But at some point, the inventory rebuild cycle that we’ve been seeing will stop—my guess is that we’ll start seeing the first signs of a slowdown before the end of the month. And then, we’ll go back to the usual buyer’s strike we see happen at the end of these cycles. Market fundamentals still point to excess capacity in 2021.”
Others, still, believe that the late-2020 price rally is not only being driven by a widespread rush to restock, it’s been driven by panic buying.
“I think a lot of what you’ve seen, is people deciding they’re going to overpay (and double-buy tons) today because they’re seeing prices go up. The idea is they’d rather overpay today than overpay by even more tomorrow,” he said. “At some point the frenzy is going to end, and as the old adage says, what goes up must come down.”
The other thing to consider, a final source added, is the added capacity that’s about to come online from Big River Steel.
“Big River [Steel] is about ready to start churning out test tons, and that’s a fact that can’t be ignored—especially considering [the mill's] expansion doubles their rated capacity,” he said. “So basically, they’ve not only showed up to the party—with beer—they just put down a glass bottle on your parents’ coffee table without a coaster.”
For now prices remain strong, and while prices have firmed by $1.00 cwt. ($22/mt or $20/nt) on the top end from levels seen last week, the “leaps and bounds” upticks seem to have finally come to an end.
Current HRC pricing is now trending at $31-$34 cwt. ($683-$750/mt or $620-$680/nt), ex-mill, although sources have said that mills are making a strong push for $35 cwt. ($772/mt or $700/nt). In terms of CRC, prices are now being heard in the range of $41-$44 cwt. ($904-$970/mt or $820-$880/nt), ex-mill. Lead times, sources note, remain strong.