While the targeted auto strike in the US was less severe than many in the US steel market were expecting, strike shutdowns at three major auto plants could start having an impact on the market, depending on how mills and service centers prepared, sources say.
Most in the market still aren’t sure how long the strike will last, but if it’s prolonged and more auto plants are affected, sources say the steel supply chain could be affected and possibly lead to inventory challenges at service centers. One bright spot sources point out is that automotive and car lot inventories are currently high, which means flat steel demand from US automakers might not be impacted in the near-term as they ride out the strikes.
Sources say the resolution of a prolonged strike would likely lead to a surge in demand for flats as automakers try to catch up, which would inevitably raise prices. But if the strike is resolved soon, with little impact on automaking or flat steel production, sources predict US domestic flats prices will continue drifting downward.
For now, US domestic flats prices are stable week-on-week as the market eyes strike developments. HRC pricing is still in the range of $34-$36 cwt. ($750-$794/mt or $680-$720/nt), FOB mill, while CRC is still trending at $44-$46 cwt. ($970-$1,014/mt or $880-$920/nt), and HDG prices are still being heard at $43-$45 cwt. ($948-$992/mt or $860-$900/nt), both FOB mill.