US flat steel prices moved higher this week as imports of flat steel could be reduced with resulting higher domestic prices, as a result of new tariffs on imported steel expected to be announced February 1 by the Trump administration, market insiders told SteelOrbis.
Recent announcements from the Trump administration indicate 25 percent tariffs could be enacted February 1 on Canada and Mexico, while China could see 10 percent additional tariffs, if steps are not taken to stem the flow of illegal immigrants across the US borders, address longstanding trade imbalances, and halt the flow of deadly fentanyl into the US. Market contacts said weekly trade in spot markets was improved ahead of the expected tariff announcements.
“Prices are slightly higher, and a bit more activity is being reported across the board in flat steel markets,” said one flat steel market insider. “Mill pricing is firmer, which I think is due to the February 1 deadline.”
Expectations for higher near-term flat steel pricing were also reflected in this week’s Consumer Spot Price (CSP) announcement from US steel maker Nucor, market insiders said. The weekly price letter to customers for hot-rolled coils announced an increase of $10/nt ($11/mt) to $760/nt ($838/mt) or $38.00/cwt. Prior to this week’s Nucor price increase, prices were flat at $750/nt ($827/mt), or $37.50/cwt., on a FOB mill basis since the week of Nov. 11.
“All three categories (HRC, CRC and HDG) were up by double digits this week,” a steel market report said. “Of course, one week does not a trend make, but statistically, it is the first time that (prices increased) for all three (steel grades) since mid-October.”
Recent media reports indicate US flat steel markets have remained in the doldrums because of the effect of low-priced imports. Recent US plant closure announcements by Nucor-Connecticut, and Liberty Steel in Illinois have quoted low-priced imports as a key reason many older US steel making facilities are often deemed non-competitive and subject to closure. Market insiders told SteelOrbis new tariffs on imported steel from the Trump administration could raise prices and make US production of steel more competitive.
In weekly flat steel markets, the SteelOrbis weekly spot average for HRC is assessed at $34.75-35.25/cwt. ($695-705/nt or $766-777/mt) on average $35.00/cwt., up from $34.00-34.50/cwt. ($680-690/nt or $750-761/mt) on a delivered to customer basis one week ago. Lead times for HRC from mills are last reported stable at 3-6 weeks, indicating markets remain well supplied heading into the first week of February.
Market insiders told SteelOrbis this week that Trump may use more limited tariffs on imported steel at first, as a key negotiating tool to force additional concessions from Mexico, Canada as well as China.
“Everyone’s waiting on the announcement of new import steel tariffs, so market activity remains limited,” one scrap market insider told SteelOrbis. The expectation for February scrap is last reported up $20-30/gt ($20-30/mt) higher than January settles as a result of reported low inventories at collection facilities and mills, on account of recent cold weather across much of the US Midwest and Southeast.
In other flat steel markets, CRC was reported on a delivered to customer basis at $925-945/nt ($1,020-1,042/mt), or on average $46.75/cwt., up from $900-950/nt ($992-1,047/mt), or on average $46.25/cwt., one week earlier. Despite weekly price increases, the current spread between HRC and CRC, the two key steel grades, declined to $235/nt ($259/mt), or $11.75/cwt., off from $240/nt ($265/mt), or $12.00/cwt., seven days ago.
Spot HDG was reported climbing higher on a delivered to customer basis in limited trade at an average $43.75/nt ($875/nt or 965/mt), up from $43.00/cwt. ($860/nt or 948/mt), a week earlier, market insiders told SteelOrbis.