US flat steel pricing was mixed again this week, with an upward bias noted in hot-rolled coil values fueled partly by higher domestic scrap pricing, even as domestic finished steel demand remains limited, market insiders told SteelOrbis this week.
This week’s market assessment differs little from that of the week of October 1 when global finished steel pricing posted the largest weekly gains in nearly a year, on renewed buying interest as a result of stimulus programs in China. While some of the global finished steel gains were expected to “spill over” into US markets, overseas markets this week remain tentative regarding the future course of China’s stimulus actions.
The SteelOrbis HRC price average rose $2.50/nt ($2.75/mt) to $720-730/nt ($794-805/mt) or $36.00-36.50/cwt., up from $715-730/nt ($788-805/mt), or $35.75-36.60/cwt., on a delivered to customer basis seven days ago.
“I think I would agree that there’s a slight potential for a price uptick over the next few weeks,” said one upper Midwest market insider that sells building products. “We’re hearing reports of steady to higher pricing, though there continues to be a backlog of work from manufacturers. They know if they wait it out, inventory will be there when and if they need it.”
The contact added that recent increases in scrap pricing usually take some time to trickle down to flat steel markets.
“I think it will be a couple weeks before we start to see flat steel prices move as a result of higher scrap,” he said.
During the October buy cycle, scrap prices rose on better demand from domestic mills as more downed units emerged from planned maintenance outages. Most grades increased an average of $20/gt in the US Midwest, Southeast and East Coast. East Coast HMS grades were sold at export yards at $350/gt, up $48/gt from September settles on steady export demand for US scrap as billet prices soared in overseas markets.
On the mill side, this week saw steel maker Nucor keep its Consumer Spot Price (CSP) for hot rolled coils steady for a third week at $730/nt. Nucor CSP pricing has risen 12.31 percent since the weekly monitor was announced at $650/nt on July 15, even as finished steel demand continues to wane.
“In short, the market remains pretty flat from last week,” said another US Gulf Coast flat steel insider. “We haven’t seen much change in prices.”
“We’re seeing a little upward bias in the flat markets this week,” said still another flat market trader. “If Asian prices hold the recent spikes next week, it seems like it will give everything a lift.”
In other flat steel markets, CRC is discussed flat to seven days ago at $940-960/nt ($1,036-1,058/mt), while prices fell in hot-dipped galvanized markets, as more production became available following the completion of recent planned maintenance, market insiders told SteelOrbis. Average HDG pricing was down $25/nt ($28/mt) to $875/nt ($965/mt), market insiders said.
In global steel news, China’s Finance Ministry is expected to announce new market stimulus programs on October 12, with analysts expecting an additional RMB 2 trillion, however, some analysts caution that the government will have to announce up to RMB 10 billion worth of new stimulus to help their flagging economic situation.