Nucor’s (CSP) -the price charges for hot-rolled coils across all of its mills- increased for a third straight week today following an earlier period of 11 weeks of price stability, even as US steel market participants continue to report tepid activity and unremarkable demand across US flat steel markets.
Market insiders said rising February scrap pricing as well as the threat of tariffs on imported steel were causing flat steel prices to move higher. At last report, February Midwest scrap is discussed at $30-40/gt ($33-43/mt) premiums to January scrap settled values. Insiders said low inventories and the effects of cold snowy weather across much of the Midwest and Southeast were supportive for February scrap prices.
In its usual Monday letter to its customers, Nucor reported its CSP up another $15/nt to $790/nt ($871/mt) or $39.50/cwt., FOB mill, up from $775/nt ($854/mt), or $38.75/cwt., one week earlier. The prior week, the CSP was up $10/nt to $760/nt ($838/mt), or $838/mt. Prior to that, the most recent price increase was reported November 4 when it increased from $740/nt ($816/mt) or $37.00/cwt. to $750/cwt., where it stayed for 11 weeks.
Even with today’s price increase, the Nucor CSP price remains at a small discount to its nearest competitor Cleveland-Cliffs, which announced a $50/nt ($55.12/mt) increase more than a month earlier, moving its February Hot Rolled Market Price to $800/nt FOB mill.
In the flat steel spot markets, the SteelOrbis weekly average for HRC was reported higher on the week at $36.00-36.50/cwt. ($720-730/nt or $794-805/mt) delivered to customer, up from $34.25-35.25/cwt. ($685-705/nt or $755-777/mt), or on average $34.75 one week earlier.
Nucor’s California Steel Industries (CSI) monitor also increased another $15/nt to $850/nt ($937/mt) FOB mill, or on average $42.50/cwt., up from $835/nt ($920/mt) or $41.75/cwt., one week earlier.
Over the past several months, flagging finished steel demand resulted in Nucor reducing its CSP by 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.