US flat steel prices are little changed versus week-ago levels even as scant demand continues, one producing mill announced an unexpected price increase, and new predictions for a $10-$20/nt ($11-$22/mt) decline in June containerized scrap values versus May settles began to weigh on this week’s spot market values, market insiders told SteelOrbis.
Mostly stable pricing this week follows steady to lower spot market values seven days ago, when talk of continued unremarkable demand and a “sideways to May” scrap buy cycle prediction for June began to emerge in spot market pricing circles, emboldening buyers to seek out bargains. This week’s June scrap call for sideways to lower further empowered buyers, SteelOrbis contacts said.
“There’s nothing too crazy going on this week,” said one SteelOrbis market insider. “The summer doldrums started early this year.”
Domestic spot HRC prices are now assessed marginally lower at $38.00-$39.00 cwt. ($838-$860/mt or $760-$780/nt) compared with previous weekly assessments at $38.00-$40.00 cwt. ($838-$882/mt or $760-$800/nt) FOB mill. Lead times for HRC are last discussed at about 4 weeks. Market insiders say the shorter lead times seen recently indicate markets remain well supplied and mill inventories adequate considering demand.
Steady to lower HRC spot pricing comes even as Nucor announced a $10/nt ($12/mt) increase in its Consumer Spot Price (CSP) base price for hot rolled coils for all its producing mills this week. The increase marks the first time Nucor has increased its CSP since the steel maker began offering weekly pricing in early April. SteelOrbis contacts said the higher CSP is likely an attempt by the steel maker to limit further declines and “stop the bleeding” in spot market HRC pricing.
“The lower scrap values that we’re seeing doesn’t bode well for the price increase at Nucor,” a contact told SteelOrbis. “The market overall is still flat with most prices unchanged to down.”
Further limiting the likelihood of price increases is the fact that US domestic containerized shredded scrap prices declined $10/nt ($11/mt) this week to $390/nt ($430/mt), market insiders told SteelOrbis, while other grades were largely flat to week-earlier levels.
“Overall, US Midwest (spot market) scrap is flat to down from prices seen in early May,” another scrap insider told SteelOrbis. “We’re seeing slack (steel) demand and very plentiful supply,” he continued, “For June the outlook we’re hearing is that people are leaning sideways to lower.”
In other steel grades, CRC is assessed slightly up on the week at $55.50-$56.00 cwt. ($1,224 -$1,235/mt or $1,110-$1,120/nt) compared with $55.00-$56.00 ($1,212-$1,235/mt or $1,110-$1,120/nt) seven days ago. The spread between HRC and CRC widened this week to $17.25 cwt ($380/mt or $345/nt) versus $16.50 cwt. ($364/mt or $330/nt) this past week.
On the galvanized front, HDG is discussed little changed on the week in extremely thin trade at $53.00-$53.25 cwt. ($1,168-$1,174/mt or $1,060-$1,065/nt) following this past week’s nearly 5% decline to $53.00-$53.50 cwt ($1,168-$1,179/mt or $1,060-$1,070/nt) FOB mill.
Spot contracts for CRC and HDG products still require 4-8 weeks lead time at last report, indicating those markets remain reasonably well supplied with mill inventories mostly adequate to meet contract requirements at this time.
