US flat steel prices continued higher amid rising scrap prices this week, even as new Section 232 tariffs announced by US President Trump were expected to further reduce flat steel imports, market insiders told SteelOrbis.
Trump’s announcement of 25 percent across-the-board tariffs on all countries seeking to export steel into the US was likely to reduce flat steel imports, insiders said, allowing domestic steel producers and distributors more levity to raise prices after a long period of sluggish market demand and limited price movement.
This week, steel maker Nucor increased its Consumer Spot Price (CSP) for hot-rolled coils for a third straight week, after a period of 11 straight weeks of reported flat prices. The CSP rose by $15/nt ($17/mt) to $790/nt ($871/mt) FOB mill, while the Nucor’s California Steel Industries’ (CSI) US West Coast HRC index also rose for a third week, rising $15/nt to $850/nt ($937/mt) FOB mill.
Insiders said rising scrap prices and the likelihood of reduced imports are stressing available mill capacity and have started to limit finished steel supply availability.
“Mills are closed for the sale of March hot-rolled coils, and they’re limiting available tons for sale in April,” said one Midwest flat steel insider. “They want to ride this (rising price) wave seriously.” The insider added that many buyers were expected to draw down inventory on hand to make up for the April shortfalls.
Following February price hikes, the combined effect of tariffs, insiders said, could also cause April scrap prices to spike significantly.
“We’re hearing sideways to higher pricing quoted for March scrap, though I’m also hearing that we could see April busheling scrap trade around $700/gt ($711/mt) come April.”
During the February scrap buy-cycle, February busheling scrap in the US Ohio Valley rose an average $45/gt ($46/mt), to $455-480/gt ($462-488/mt). Other Midwest scrap grades rose an average of $35/nt ($36/mt), as insiders said scrap inventories remain low at both suppliers and mills after recent cold weather and snow storms complicated scrap transportation and supplier scrap processing equipment, resulting in “significant amounts of January scrap still being owed to mills,” one Midwest scrap insider told SteelOrbis as markets prepared for the monthly February scrap buy-cycle.
In weekly flat steel markets, the SteelOrbis weekly spot average for HRC is assessed at $745-755/nt ($821-832/mt), on average $750/nt ($827/mt), or $37.50/cwt., up from $36.00-36.50/cwt. ($720-730/nt or $794-805/mt), or on average $36.25/cwt., one week earlier. Lead times for HRC are discussed at 6-8 weeks, indicating markets remain reasonably supplied heading into the third week of February.
In other flat steel markets, CRC was reported on a delivered to customer basis at $925-935/nt ($1,020-1,031/mt), or $46.25-46.75/cwt., up from $915-925/nt ($1,008-1,020/mt), or on average $46.00/cwt., seven days ago. At present, the current spread between HRC and CRC, the two key steel grades, declined again by $25/nt ($28/mt) to $170/nt ($187/mt), from to $195/nt ($235/nt), or $9.75/cwt., a week earlier.
Following on previous price increases, spot HDG once again rose an average $0.75/nt on a delivered to customer basis to $870-880/nt ($959-970/mt), or on average $43.75/cwt., up from an earlier $860-870/nt ($948-959/mt), or $43.00-43.50/cwt., one week ago.