Spot market prices for US domestic HRC and CRC have firmed once again, sources note, and while US HRC prices are now trending in the range of $82-$83 cwt. ($1,808-$1,830/mt or $1,640-$1,660/nt), FOB mill (against $80-$81 cwt. ($1,764-$1,786/mt or $1,600-$1,620/nt), FOB mill, a week ago) many think it’s “just a matter of time before prices hit the $85 cwt. ($1,874/mt or $1,700/nt) threshold.”
US CRC spot market prices have also inched up in the past seven days, and are now being heard at $92-$93 cwt. ($2,028-$2,050/mt or $1,840-$1,860/nt), FOB mill, against $90-$91 cwt. ($1,984-$2,006/mt or $1,800-$1,820/nt), FOB mill, a week ago.
In a mid-week webinar hosted by SMU, Bank of America analyst Timna Tanners dismissed notions that $80 +/- cwt. ($1,764/mt or $1,600/nt) HRC is the “new normal.”
“We shouldn’t assume that $1,600/nt HRC is the new normal any more than the $400/nt HRC pricing we saw last summer was going to be the new normal,” Tanners said during her presentation. When supply chains catch up and condition normalize, she added, things should swing back the other way.
“Think of it like hand sanitizer in 2021 versus 2020, Tanners continued. “The ability for companies to get their products to customers are also being impacted by many things, like shortages in labor, trucking, and logjams at ports. Companies are scrambling to catch up with demand.”
Tanners also believes that still-pending new capacity will still lead to what she calls a “Steelmageddon” price situation.
“[Steelmageddon] is still upon us, but I think it’s just been pushed out by a year. The [still-pending new capacity for sheet steel] hasn’t been cancelled; it’s been delayed,” she said, adding that in some cases, mills couldn’t source engineers, or parts to build new facilities, during the height of the pandemic.
“Of all the projects that were supposed to come online, Big River is the only one that’s started. I don’t think the market has changed and I don’t think steel consumption is dramatically different than it has been in the past. New supply is still coming on. It’s just a matter of time before [that] new capacity hits the market.”