Spot market prices for US domestic flat rolled steel products have remained strong in the past week, and for now, it appears the uptrend is likely to continue. “Supply is tighter than we’ve ever seen it,” a source said, adding he thinks that prices have the potential to stay strong through March.
“With the way that the domestic market is looking, offshore steel is starting to look a lot more attractive,” he said. “I think we could see prices stay strong until imports start showing up.”
Other sources have said they’re “fielding inquiries left and right,” noting that several larger OEMs have begun reaching out to service centers, “because they can’t even get 300 tons from the mill. Service centers have been really, really busy.”
“This year really has been the perfect storm. Between mills’ COVID-related shutdowns, and being cautious about restarting because of the uncertainty surrounding the [presidential] election (and whether Biden’s policies would be as friendly to big business as the Trump administration’s policies have been), the market is still squeezed for supply and the mills have the upper hand.”
Another factor linked to the tightness in steel supply comes from ArcelorMittal USA. Earlier this week, the mill reported that a coronavirus outbreak at its Burns Harbor, Indiana, has caused production delays. According to sources, some orders, placed for January production, will now be pushed to February. “The situation at AMUSA certainly hasn’t helped,” another source added.
And if US scrap prices firm as they’re expected to during next months’ buy-cycle, flats mills could try for another price increase. “The market is strong and we think prices could keep going up,” a final source said. As of this week, US HRC prices are now trending in the range of $34-$36 cwt. ($750-$794/mt or $680-$720/mt), ex-mill, against a range of $32.50-$35.50 cwt. ($717-$783/mt or $650-$710/nt) ex-mill, a week ago.
Further, US CRC prices are now trending at $44.50-$46.50 cwt. ($981-$1,025/mt or $890-$930/nt), ex-mill, against a range of $43-$45 cwt. ($948-$992/mt or $860-$900/nt), ex-mill, a week ago. Sources have been quick to point out that HRC prices are now at their highest point since January 2019; in terms of CRC, the last time cold rolled prices were this high was more than 2 years ago, in October 2018.
Yet despite price happenings today, there are still factors that are worth keeping an eye on. For example, Big River Steel is in the process of dialing up production, in addition to rumors that US Steel plans to restart its No. 4 blast furnace at its Gary Works, Indiana plant, in the early part of next month. Although production at Big River, and the possible resumption of production at Burns Harbor, is unlikely to impact the market in the short term, it could impact market prices in Q1 2021.