Nucor’s (CSP) -the price charges for hot-rolled coils across all of its mills- increased for a sixth week today following an earlier 11-week period of price stability, fueled by rising scrap prices and an expected decline in imports once and if US President Trump brings threatened 25 percent tariffs to bare on Mexico and Canada on March 4, market insiders told SteelOrbis this week.
In its usual Monday letter to its customers, Nucor reported its CSP rose another $40/nt ($44/mt) to $900/nt, ($992/mt), or $45.00/cwt., FOB mill, up from the prior week’s ($860/nt ($948/mt) or $43.00/cwt. Since the beginning of recent Nucor price increases for HRC on January 27, values have risen by a full 20 percent. Prior to that, prices were stable for nearly three months at $750/cwt.
This week, Nucor’s CSP now matches its nearest competitor, Cleveland, Ohio-based Cleveland Cliffs, which announced on February 21, that its April Hot Rolled Market Price would increase $100/nt to $900/nt FOB mill ($992/mt), or $45/cwt.
Nucor’s California Steel Industries (CSI) monitor also increased another $40/nt ($44/mt) to $960/nt ($1,058/mt), or $48.00/cwt., on an FOB mill basis, up from $920/nt ($1,014/mt), or 43.00/cwt., seven days ago.
Insiders said low inventories and the effects of cold snowy weather across much of the eastern two-thirds of the US were supportive for February scrap prices. And while recent weather has moderated somewhat, March scrap is last discussed at $30-40 premiums ($30-41/mt) to February scrap market settled values, insiders tell SteelOrbis.
New recently announced tariffs on imported steel from Canada and Mexico by the Trump administration are expected to further reduce imports of steel into the US, allowing domestic producers increased levity to raise prices, market insiders told SteelOrbis. The two nations account for about 10 percent of scrap consumed in the US each year.
At a mid-afternoon press conference, Trump indicated that 25 percent tariffs on Canada and Mexico will go forward tomorrow, despite measures the two US trading partners have taken since a 30-day pause was announced on February 3. While late negotiations today could change the tariff situation, it seems even more certain that tariffs on China will increase from 10 percent to 20 percent effective tomorrow.
In the domestic flat steel spot markets, the SteelOrbis weekly average for HRC climbed again this past week to an average $860/nt ($949/mt), or $43.00/cwt., up from $850/nt ($937/mt), or $42.50/cwt., one week ago.
Over the past several months, flagging finished steel demand resulted in Nucor reducing its CSP as low as $650/nt ($717/mt), or $32.50/cwt. during the week of July 15. Since that time, however, prices have fallen only once for two weeks on October 14 and October 21 to $720/nt ($794/mt) or $36.00/cwt., from $730/nt ($805/mt) or $36.50/cwt. Market insiders report that Nucor continues to keep its posted CSP pricing above the mills’ $32.50/cwt. variable cost of doing business because selling below that price could cause the mill to lose money, they said.