US domestic HRC market being “watched closely”

Movers and shakers within the US domestic hot rolled coil (HRC) market seem to be divided when it comes their opinions of where the market is heading.  Prices for the past seven days have, for the most part, held sideways, still at $32.50-$33.50 cwt. ($717-$739/mt or $650-$670/nt) ex-Midwest mill, but SteelOrbis sources say fewer and fewer buyers are booking orders at the top end of that range and that rumblings of deals approximately $0.50 cwt. ($11/mt or $10/nt) below that range are making their way through the market.

On one hand, mills are catching up to their order books and are looking to span delivery times back out.  On the other hand, US domestic scrap dealers are feeling a bit more positive than they were just one week ago, and feel that if the market hasn’t reached bottom it will get there soon. If raw materials costs do hold strong, this could leave HRC trending sideways. But, if you look at historic data from 2010-2012, HRC prices in June have traditionally softened (last year, they firmed by $1.00 cwt. between the start and close of the month).  For now, it’s a watch-and-wait type of situation, as buyers are being cautious until things become clearer.

In terms of offshore futures pricing from Mexico and India, those have held neutral since our last report a week ago, and buyers say they’re taking a conservative approach when it comes to booking futures.