HRC steel futures for October delivery on the Comex soared nearly 3 percent September 12 amid reports that Cleveland-Cliff’s C-6 blast furnace, located in Cleveland, Ohio, is likely to be hot-idled in October, a move that could reduce total available steel capacity for the steel maker next month, and one that might prove permanent, market sources told SteelOrbis today.
Hot-idling allows a blast furnace to remain heated so it can be brought back into operation more quickly than if it were shut down.
The October contract on Comex is last up another $14 per short ton (st) or 1.88 percent to $758/st ($835/mt), with the October volume is registering 89 contracts, versus 11 contracts so far for November.
News of the plant closure caused October futures to settle up $22/st to $744/st, after trading as high as $765/st during the session. Volume in the October contract totaled 818 contracts yesterday, far outpacing the nearest November contract which totaled 212 contracts for the day.
“Cliff’s idling of the No. 6 furnace caused futures prices to soar,” a market insider told SteelOrbis. “From now until the end of October, with so many outages in place, any bullish indicator is going to affect pricing.”
Recent industry reports indicate about 1.8 million st of capacity (1.98 million mt) is expected to be unavailable in the US between September and December, as a result of planned maintenance at steel making facilities. Many of these scheduled outages may have been moved up by 30-60 days this year, market contacts said, as many mills try to have their capacity fully available earlier in the fourth quarter and into Q1 2025 when market analysts are forecasting higher finished steel prices.
The No. 6 facility is one of two blast furnaces at the Cleveland Works location, and one of 10 older blast furnaces used by Cliffs to bolster steelmaking capacity during times of planned maintenance at its other facilities, the company said recently. The No. 6 facility was restarted in January of this year and has a daily capacity of 4,150 st (4,573 mt). The second unit at the site, the larger No. 5 facility, has a daily capacity of 4,300 st (4,739 mt) and was restarted in August 2022 following a full re-line procedure.
Calls to confirm details of the outage with Cleveland Cliffs were not immediately returned.