US domestic sheet steel prices are down once again week-over-week, and some sources speculate that prices will continue to fall until HRC softens by another $10 cwt. ($220/mt or $200/nt).
This week, US HRC prices are trending at $53-$55 cwt. ($1,168-$1,213/mt or $1,060-$1,100/nt), FOB mill, against a range of $57-$60 cwt. ($1,257-$1,323/mt or $1,140-$1,200/nt), FOB mill, a week ago. CRC prices are also down week-over-week, and are now being heard at approximately $79-$82 cwt. ($1,742-$1,808/mt or $1,580-$1,640/nt), FOB mill, against a range of $80-$83 cwt. ($1,764-$1,830/mt or $1600-$1,660/nt), FOB mill, a week ago.
In terms of lead times, HRC is trending at 3-4 weeks, whereas CRC lead times are being heard at 6-7 weeks.
“The market is basically in a death spiral,” one source said. “I wouldn’t be at all surprised if we saw prices come down another $1-$3 cwt. ($22-$66/mt or $20-$60/nt) within the next couple of weeks.”
A second source agreed that the downward price trend isn’t over yet. “In the end, if you look at what happened in early March, the mills had everyone convinced that there was going to be a shortage of scrap, a shortage of pig iron and that everyone needed to buy buy buy, and that’s what drove prices up,” he added. “All of that was crap. There is no shortage of steel, there was never a shortage of steel, and all of those people who rushed out and bought steel they didn’t need, because they thought there was going to be a shortage, now they’re stepping back.”
Other sources polled say they think that HRC prices won’t bottom out until they’re below $40 cwt. ($882/mt or $800/nt), FOB mill.
“I think it’s going to keep falling and then I think we’re going to see a bounce back,” he added. “It’s the same cycle we’ve seen over and over again.”
A final source offered his perspective on the market, adding that while he’s pegging HRC prices still have “quite a bit of correcting to do” before this slide stops, many of his colleagues feel he’s a bit too alarmist.