Despite rising this past week as stocks of lower-priced flat steel were sold from existing pre-tariff stocks, US flat steel prices fell back to levels seen two weeks earlier as it appears May scrap pricing will likely settle lower for a second month, market insiders told SteelOrbis.
This week, while market activity remained fairly thin, price quotations for spot HRC ranged $820-860/nt ($904-948/mt), or $41.00-43.00/cwt., with the majority of trades noted $30/nt less on the week at $845/nt ($931/mt), or $42.25/cwt. Since the last week of March, SteelOrbis data shows HRC coil spot pricing has fallen more than 11 percent or $105/nt ($116/mt), or $5.25/cwt., from a yearly SteelOrbis HRC spot price high of $950/nt ($1,047/mt).
“We’re seeing continued slow demand and an oversupply of inventory,” commented one flat steel market insider to SteelOrbis, after quoting this week’s trading activity in a $820-860/nt range.
On the mill side, Nucor’s Consumer Spot Price (CSP) declined $20/nt to $910/nt ($1,003/mt), or 45.50/cwt. Nucor’s primary competitor Cleveland-Cliff’s May spot order book price for HRC remains steady since April 11 at $975/nt ($1,075/mt), or $48.75/cwt.
Insiders said pressure on flat steel pricing could continue near term based on lower May scrap values and continued low demand from domestic finished steel mills, some of which have been reported to be in a “no-buy, limited buy, or reduced buy” position for May scrap as a result of limited domestic and export demand for scrap.
“Lots of furnaces have been idled, and some mills are even out of the scrap market for May,” commented one Midwest scrap insider.
“High levels of scrap supply are still driving lower May price expectations,” said another SteelOrbis contact that deals in steel scrap. “We’ve done May scrap purchases at a $40/gt discount for cuts and shreds and a $30/gt discount to April settles on prime busheling grades.”
Based on a $40/nt discount to April settlement pricing, May shredded scrap in the US Ohio Valley is likely to settle at $375-380/gt ($381-386/mt), while prime busheling scrap grades could settle around $435-460/nt ($442-467/mt). May scrap is expected to settle early next week, insiders told SteelOrbis.
In the cold-rolled markets, spot pricing was little changed in thin trade with with most spot transactions noted in a $1,120-1,130/nt ($1,235-1,246/mt) range, or on average $1,125/nt, off $5/nt from a week earlier. Despite both falling HRC and CRC pricing, the key spread between the two key steel grades increased by $25/nt to $280/nt ($309/mt), or $14/cwt.
In the coated finished steel sector, spot HDG base product is assessed $960-$1,000/nt ($1,058-1,102/mt) on a delivered basis, or on average $980/nt, off from $1,115-1,120/nt ($1,229-1,235/mt), or $55.75-56.00/cwt., one week earlier.
Market insiders said weekly steel pipe and plate pricing could begin to slump as HRC pricing continues down and new demand for pipe for oil and gas exploration slumps as oil prices fall below a $65/bbl investment target level, pipe insiders told SteelOrbis recently. US benchmark West Texas Intermediate (WTI) crude oil last traded at $60.82/bbl, up 1.52 percent on the day, though off more than 15 percent over the past three months.
In the pipe markets, hollow structural section (HSS) pricing was discussed this week at $1,400/nt ($1,543/mt), or about $0.70/cwt, down 20 percent over the past three weeks. Steel plate is last discussed flat $850/nt ($937/mt), or $42.50/cwt., though further price decline could be in store, insiders said.