US flat steel markets were mixed this week as increased expectations for higher scrap pricing in August seems to have established a price floor under most flat steel grades, market insiders told SteelOrbis this week.
While hot-rolled and galvanized grades were marginally higher, mostly on expectations for rising scrap prices, cold-rolled coils, -which as correctly predicted during the week of July 22- continued to slip versus other grades, because the historic spread of CRC to HRC still remains too high.
“My customers are wondering just how much risk (they) should take,” an analyst told SteelOrbis during a July 25 interview. “Most are saying that you have to be a real gambler these days. I’ve told them the downside risk is limited, so they seem to be holding out for (CRC) prices to go lower, (while) higher scrap pricing should put a floor under HRC.”
Another SteelOrbis contact added, “I’m not surprised that the spread between HRC and CRC is narrowing,” he said. “For many years, the spread has been between the two grades has been $80-$120 per ton (FOB mill) depending on market conditions. Six weeks ago, the spread was over $300 per ton. Today, it’s closer to $250.”
On the spot market pricing front, domestic CRC is assessed nearly 3% lower on the week at $45.50-$46/cwt. ($910-$920/nt or $1,003-$1,014/mt) FOB mill, versus this past week’s $47.00-47.25/cwt. ($940-956/nt or $1,036-1,042/mt) FOB mill range. SteelOrbis data shows the current price spread between HRC and CRC is currently $250/nt or $12.50/cwt., down from $288/nt or $14.38/cwt the week of July 22.
HRC prices are reported marginally higher at $32.75-$33.75/cwt. FOB mill ($722-744/mt or $655-675/nt), compared with $32.50-$33.00/cwt. ($650-660/nt or $717-728/mt) the week of July 22. Lead lead times for delivery of spot HRC remain steady at 3-4 weeks, insiders said, indicating markets are well supplied and mill inventories adequate heading into the first week of August.
As predicted during the week of July 22 by SteelOrbis, Steelmaker Nucor’s increased its weekly Consumer Spot Price (CSP) -the price it charges for hot-rolled coils across all of its mills- by 3.84 percent on July 29, on rising raw materials costs and increased order activity, the steelmaker said in a letter to its customers.
Nucor’s CSP price rose to $675/st ($744/mt) FOB mill, the first price increase since the steelmaker increased its CSP a mere $10/st ($10/mt) on May 20, even as US domestic scrap prices remained in free fall. The California Steel Industries (CSI) index also increased $25/st ($28/mt) to $745/st FOB mill, ($821/mt), the steelmakers said.
Nucor explained,” While a surge in dumped and subsidized flat rolled imports during the first half of 2024 has affected our pricing, we are currently experiencing higher raw material prices and have recently seen increased order entries reflecting our customers’ resilient underlying demand.”
One market insider said the Nucor statement was a direct reference to rising August scrap prices. “If that is not a confirmation that August scrap pricing is up, I don’t know what is,” the SteelOrbis market participant said.
In coated products, HDG is discussed in light trade at a bit higher at $43.00-$43.50/cwt. ($860-$870/nt or $948-$959/mt) FOB mill, compared with previous assessments at $43.25-43.50/cwt. ($865-870/nt or $954-959/mt), market insiders told SteelOrbis.
