Sources close to SteelOrbis have confirmed that domestic flat rolled steel prices have continued to spike in the past 7 days.
As of today, US HRC prices are trending at approximately $49.50-$51.50 cwt. ($1,091-$1,135/mt or $990-$1,030/nt), FOB mill, against $45-$47 cwt. ($992-$1,036/mt or $900-$940/nt), FOB mill, on March 3.
US domestic CRC and HDG prices are also up week-over-week. Cold rolled coil spot market prices are now trending at $58-$60 cwt., ($1,279-$1,323/mt or $1,160-$1,200/nt), FOB mill., against $54-$56 cwt. ($1,191-$1,235/mt or $1,080-$1,120/nt), FOB mill, a week ago.
HDG spot market prices have also jumped substantially and are now (finally) trending above CRC prices.
The current spot market price transaction range for this product is being heard at roughly $60-$62 cwt, ($1,323-$1,367/mt or $1,200-$1,220/nt), FOB mill, against $53.50-$55.50 cwt. ($1,179-$1,224/mt or $1,070-$1,110/nt), FOB mill, seven days ago.
The big question relates to how long this uptrend will last.
One source was quick to point out that overall steel demand is lower than it was in 2019. Auto production has not returned to 2019 levels, he said, adding that nonresidential construction is still more than 25% lower that it was in 2019.
“If there was enough steel in 2019, there should be enough now,” he said. “[These increases aren’t because of] demand, it’s because capacity is offline.”
Not only is the domestic capacity utilization rate still hovering below 75%, compared to 79.6% during the same reporting period a year ago, import arrivals have also been declining due to the low-cost of domestic HRC, CRC, and HDG coil seen in the latter part of 2022.
For example, February license data from the US DOC notes that for that same month, the US imported approximately 92,500 mt of hot rolled coil, 76,250 mt of cold rolled coil, and 132,750 mt of hot dipped galvanized sheets and strip from global sources. Import HRC tons from Mexico are also down substantially due to a fiscally-related production outage Altos Hornos de Mexico (AHMSA).
Trader sources have said that while offshore bookings haven’t picked up much as of yet, it’s largely suspected that this is on the horizon.
Additionally, some sources speculate that buyers may start to “double book,” and place orders with both domestic and offshore producers, as a means of cost-averaging their inventory.
“I think prices are high enough now that people are going to start looking offshore, and once those orders start to arrive, that steel is going to start placing pressure on domestic prices,” a source said.
Another source said he believes that while the market is on its way up now, that in the long-term, higher prices are unlikely to last.
“Whether we see this thing start to break in Q2 or if it holds off until Q3, that’s the big question,” he said. “But when this thing starts to turn around, I think it’s going to turn around fast.”