US domestic flat steel prices were mostly higher this week amid reports that domestic flat steel demand remains solid, even as available supply could be more limited over the next several months, market insiders told SteelOrbis.
As the war in the Middle East continues to rage for now a third full week, the expected start of spring maintenance operations at domestic mills, already slashed imports as a result of continued 50 percent steel import tariffs, combined with rising freight and energy costs with the Iran war, are expect to remain supportive for domestic flat steel pricing, market insiders said.
“I think the [flat steel] market is flattening and [long lead times] should keep prices strong and avoid a quick decrease,” said one US Gulf Coast flat steel insider.
In the weekly hot-rolled coil markets, prices continued higher above the “psychological $1,000/nt ($1,102/mt) mark,” with most trades noted on average $3/nt higher at $1,013/nt ($1,117/mt), or $50.65/cwt., against a week-earlier $9/nt advances to $1,010/nt ($1,113/mt), or $50.50/nt. Lead times for new HRC production were last discussed at 6-10 weeks, up from 3-5 weeks earlier this year, insiders said.
And as worldwide war-related risk premiums continue to advance, the price of March hot rolled coil futures (HRC) on the New York Mercantile Exchange (March 20) stand at $1,012/nt, up $3.00/nt on the day. April and June futures are up $2.00/nt and $9.00/nt, respectively, trading at $1,034/nt and $1,063/nt.
Steel insiders told SteelOrbis ocean-going freight rates are up now between $40-60 a metric ton (mt) as a result of the ongoing conflict in the Middle East. Higher fixed costs are likely to make import steel prices less competitive with domestic production, giving local producers even more leverage when considering future price increases, they said.
This week, Charlotte, North Carolina-based Nucor continued to raise its Consumer Spot Price (CSP) for flat-rolled coils for a ninth time in 12 weeks, by another $5/nt on an FOB mill basis to $1,015/nt, ($1,119/mt), or $50.75/cwt., up from $1,010/nt ($1,113/mt), or $50.50/cwt., one week earlier. Since the end of October, when CSP prices started a steady advance following an eight-week period of stability at $875/nt, the Nucor CSP has increased 16 percent. Nucor‘s California Steel Industries (CSI) price also rose another $5/nt on the week to $1,065/nt ($1,174/mt), or $53.25/cwt., up from $1,060/nt ($1,168/mt), or $53.00/cwt., seven days earlier.
And, while rising fuel costs remain only one component in higher shipping fees, the price of benchmark Brent crude oil has increased about 40 percent since the conflict started on Feb. 28. And, according to shipping industry monitor Ship and Bunker, the average price of very low sulfur fuel oil (VLSFO) used by many ships across the world’s 20 largest refueling ports, has nearly doubled to $1,049 per metric ton (mt) (March 20), up from about $544/mt the day before hostilities began in Iran.
In the cold-rolled steel markets, following previous weekly price increases totaling $14/nt, spot pricing slipped on average by $4/nt to $1,146/nt, ($1,1265/mt), or $57.30/cwt., off from $1,150/nt ($1,268/mt), or $57.50/cwt., on a delivered to customer basis one week earlier. Based on a slight increase in HRC prices and a slight dip in CRC values, the current spread between the two key steel grades stands little changed for the week at $130/nt, or $6.65/cwt., off only $4/nt from a week earlier when it finished the week at $134/nt or $6.70/cwt.
In the hot-dipped galvanized (HDG) spot market, the SteelOrbis HDG average price finished the week $4/nt higher at on average $1,129/nt, ($1,245/mt), or $56.45/cwt., up from $1,125/nt ($1,240/mt), or $56.25/cwt., one week earlier.
On the steel raw materials front, following March’s sideways settles, April ferrous scrap is talked in the US Midwest at sideways to potentially $10-20/gt lower, especially for cut grades, insiders said. During March scrap supply negotiations, US Ohio Valley prime bushing scrap settled sideways at $445-452/gt ($452-462/mt) on an FOB mill basis, while shredded material finished at $445-450/gt ($452-456/mt). In the cut grades, P&S scrap settled at $421-431/gt ($427-437/mt) FOB mill, while HMS closed trade steady at $385-405/gt ($390-410/mt).