Spot market prices for US domestic HRC have ticked down once again in the past week as the market prepares for a possible UAW strike. Should the targeted strikes happen, automotive production at all three unionized automakers could potentially grind to a halt.
According to a September 14 report by CNN, “Slowing or stopping the production of a few engine or transmission plants at each company could be as effective at stopping operations as a full strike at all plants.”
SteelOrbis previously reported that a strike also has the potential to add roughly 90,000 metric tons of excess flat rolled steel to the market every month for as long as the strike goes on.
The uncertainty over whether the auto union will or won’t strike is already taking a toll on the domestic flat rolled steel market.
Current HRC pricing has fallen by roughly $2.00 cwt. ($44/mt or $40/nt) in the past week to the range of $34-$36 cwt. ($750-$794/mt or $680-$720/nt), FOB mill, although deals up to $2.50 cwt. ($55/mt or $50/nt) below this range have been heard for volume orders.
CRC and HDG prices are also down week-over-week, with CRC prices now trending at $44-$46 cwt. ($970-$1,014/mt or $880-$920/nt), and HDG prices being heard at $43-$45 cwt. ($948-$992/mt or $860-$900/nt), both FOB mill.
Lead times for US HRC are still trending at 4-5 weeks, whereas lead times for CRC and HDG coil have lengthened slightly in the past 7 days to approximately 6-8 weeks. A week ago, lead times for CRC and HDG coil were trending at 4-7 weeks and 5-7 weeks, respectively.
The United Auto Workers has said they’re prepared to initiate targeted strikes at Ford, General Motors, and Stellantis if a new labor deal is not reached by 11:59pm Thursday night. Flat market sources say they expect additional downward pressure on the market if the strike moves forward.