Sources close to SteelOrbis have said that while US HRC and CRC are “hardly on a rocket-propelled upward trajectory” after mills’ announced $3.00 cwt. ($66/mt or $60/nt) price increase, deep discounts seen before the announcements are no longer available.
“Are prices up $3.00 cwt.? No,” a source said. “Are the deals gone? Yes.”
Not only are sub $30 cwt. ($661/mt or $600/nt) HRC deals no longer on the table, sub $40 cwt. ($882/mt or $800/nt) CRC deals “have also gone by the wayside.”
The current average range for US HRC is now trending at approximately $30.50-$33.50 cwt. ($672-$739/mt or $610-$670/nt), FOB mill, against $30-$32 cwt. ($662-$705/mt or $600-$640/nt), FOB mill, week ago. The current average range for US CRC, however, is “mostly stable” week-over-week, at $41-$44 cwt. ($904-$970/mt or $820-$880/nt), FOB mill.
Some individuals polled said they've heard of transactions that have taken place at prices "slightly above" the abovestated ranges.
Similar to last week, all sources polled believe that price increase announcement #2 is “right around the corner,” with many believing that the second increase will be rolled out between Christmas and New Year.
“I think prices are going to have to move because [in selling at pre-increase price points] the mills were probably close to their break-even point,” another source said. “There are also some other things to consider, like the fact that scrap is up this month and people are already talking about it going up again next month too. For as much as mills try to say that the price of steel isn’t tied to the price of scrap, they’ve always been really good about sending out price increase announcements the second their input costs start to go up.
Where prices settle after the second increase is rolled out is still a matter of speculation, however, it is believed that HRC will climb to and hover around $35 cwt. ($772/mt or $700/nt), FOB mill.