US flat steel prices continued higher this week amid reports of solid domestic flat steel demand and continued gains in global energy markets, the result of continued hostilities in the Middle East, now in their fifth week, market insiders told SteelOrbis.
Flat steel values rose on average $10/nt to a weekly $1,035/nt ($1,141/mt), or $51.75/cwt., on an FOB basis, up from $1,025/nt ($1,130/mt), or $51.25/cwt., one week earlier. With the spring construction season soon to commence, insiders told SteelOrbis lead times for new HRC production were last discussed at 6-10 weeks, up from 3-5 weeks in earlier reports. Insiders also said spring maintenance starts at local flat steel mills also could further reduce local mill supply flexibility this month.
“Mills are echoing price increases due to energy costs on all products,” said one US Midwest steel insider. “LNG costs are soaring, while inland freight costs also are up, so we’re seeing 20-25 percent fuel surcharges out there.”
“The mills are increasing their prices to cover their higher energy costs, not a weekly scrap price change” reported another flat steel trader.
The US domestic ferrous scrap market is expected to reach an inflection point in April, with prices decreasing by $20/gt ($20.3/mt) for secondary/obsolete grades, while prime grades could remain sideways.
“Scrap is looking more sideways than down, versus a week ago,” remarked one US Gulf Coast steel insider, when asked about his view of the current scrap market sentiment this week. “People are calling this the Turkey affect this month.” Monthly US scrap trade negotiations are expected to begin next week.
This week, Charlotte, North Carolina-based Nucor continued to raise its Consumer Spot Price (CSP) for flat-rolled coils for an eleventh time in 14 weeks, by another $10/nt on an FOB mill basis to $1,035/nt ($1,141/mt), or $51.75/cwt., up from $1,025/nt, ($1,130/mt), or $51.25/cwt., one week prior. Since the end of October, when CSP prices started a steady weekly advance following an eight-week period of stability at $875/nt, the Nucor CSP has increased more than 18 percent. Nucor‘s California Steel Industries (CSI) price also rose another $10/nt this week to $1,085/nt ($1,196/mt), or 54.25/cwt., up from $1,075/nt ($1,185/mt), or $53.75/cwt., FOB mill, one week ago.
In the US oil markets, West Texas Intermediate crude oil (WTI) sold in excess of $100 per barrel on March 30, the first such instance on record since July 2022. WTI traded at $111.50/bbl on April 2. US average diesel fuel pricing is reported at $5.3750/gal, according to the Washington, DC-based Energy Information Administration, up more than $1.80/gal from one year ago.
In the cold-rolled coil markets, spot CRC on an FOB basis is discussed on average $15/nt higher on the week at $1,165/nt ($1,284/mt), or $52.85/cwt., up from on average $1,150/nt ($1,268/mt), or $57.50/cwt., one week prior. Based on a $10/nt increase in weekly HRC prices and a larger $15/nt bump in CRC values, the current spread between the two key steel grades stands at $130/nt, or $6.50/cwt., up from $125/nt, or $6.25/cwt., one week ago.
“Flat steel prices keep rising, and lead times for new production at mills are reported at the end of May,” remarked another flat steel trader to SteelOrbis at midweek. “Some mills are reporting that HRC and CRC products are very tight and that HDG has caught up with demand, and is also starting to get tighter.” He continued. “We see pricing short term headed toward the $52.00/cwt level [1,040/nt or $1,146/mt], with some mills expecting $52.50/cwt., [$1,050/nt or $1,157/mt] for base HRC,” he said.
In the hot-dipped galvanized (HDG) spot market, the SteelOrbis HDG average price finished the week at $1,140/nt ($1,257/mt), or $57.00/cwt., up $5.00/cwt., from $1,135/nt ($1,251/mt), or $56.75/cwt., on an FOB basis one week ago.