US flat steel prices were lower again this week on a combination of continued low end-May demand and a forecast for sharply lower settled June scrap values, even as a key US producing mill announced another price increase, market insiders told SteelOrbis.
This week’s lower pricing differs from this past week when US flat steel prices were little changed from week-earlier levels even as scant demand and lower June scrap calls dominated conversations. Last week also saw Nucor announce the first of two price increase in its Consumer Spot Price (CSP) for hot-rolled coils.
This week’s lower HRC spot pricing coincided with another $10/nt ($11/mt) or $0.50/cwt. increase in Nucor’s CSP, bringing the price it charges at all of its producing mills to $780/nt ($860/mt) or $39.00/cwt.
Market insiders say the two consecutive Nucor price increases are a continuing attempt by the steel maker to limit further price declines and “stop the bleeding” in spot market HRC pricing.
Domestic spot HRC prices are now assessed at $37.75-$38.25/cwt. ($832-$843/mt or $755-$765/nt) off marginally from this past week’s $38.00-$39.00/cwt. ($838-$860/mt or $760-$780/nt) range. Lead times for HRC are estimated at 4 weeks. Market insiders say the short lead times seen recently show markets remain well supplied and mill inventories adequate heading into June, so new buying could remain scant.
“The situation right now doesn’t appear to be very good,” said one SteelOrbis scrap contact predicting as much as a $40/nt ($44/mt) or $2.00 cwt. decline in the price of Midwest scrap for June. at the beginning of this week “We’re seeing really thin order books, with inventories high at certain mills. We don’t expect business to be too great until July.”
As of report writing, consensus seems to indicate a $20-$30/nt ($22-$33/mt) or $1.00-1.50/cwt. decline in the settled price of scrap in June for both the Midwest and US East Coast markets. Last week's reports called for a $10-$20/nt ($11-$22/mt) decline for June scrap values versus May settles. Scrap markets are expected to settle sometime next week.
In other steel grades, CRC is assessed at $54.75-$55.50/cwt. ($1,207-$1,224/mt or $1,095-$1,110/nt) compared with $55.50-$56.00/cwt. ($1,224 -$1,235/mt or $1,110-$1,120/nt) a week prior. The spread between HRC and CRC declined marginally this week to $17.13/cwt. ($378/mt or $343/nt) versus $17.25 cwt ($380/mt or $345/nt) seven days ago.
On the galvanized front, HDG fell the most among the flat grades reported, market insiders say, declining to $51.50-$52.00/cwt. ($1,114-$1,146/mt or $1,030-$1,040/nt) FOB mill, versus prior week assessments at $53.00-$53.25 cwt. ($1,168-$1,174/mt or $1,060-$1,065/nt).
Lead times for CRC and HDG products are discussed at 4-8 weeks, indicating those markets remain mostly well supplied with mill inventories nearly adequate to meet current requirements heading into June.
