US domestic sheet steel prices have been rising steadily for the past 12 months, and with each passing day, sources feel more increasingly confident that prices will continue to rise through the end of the year.
This week’s HRC prices are trending at $93-$95 cwt, ($2,050-$2,094/mt or $1,860-$1,900/nt), FOB mill, against a range of $92-$95 cwt. ($2,028-$2,094/mt or $1,840-$1,900/nt), FOB mill, a week ago. CRC prices have also firmed week over week and are now being heard at $103-$105 cwt. ($2,271-$2,315/mt or $2,060-$2,100/nt), FOB mill, against a range of $102-$105 cwt. ($2,249-$2,315/mt or $2,040-$2,100/nt), FOB mill, a week ago.
To put that into perspective, during the same reporting period last year, HRC prices were trending at $22-$23 cwt. ($485-$507/mt or $440-$460/nt), FOB mill, while CRC prices were hovering in the range of $31-$33 cwt. ($683-$728/mt or $620-$660/nt), FOB mill.
“Every time we think that production is going to catch up with demand, another wrench is thrown into the mix,” a source said, noting the pending 38-day blast furnace outage that’s scheduled to take place at US Steel Gary Works in late September. Other domestic steelmakers, including Nucor and Cleveland-Cliffs, have also announced similar maintenance outages that are scheduled to take place in the fall. Cleveland Cliffs will idle its No. 7 Blast Furnace at Indiana Harbor East between Sept. 1 and Oct. 15. Nucor’s outage is scheduled to begin in November.
Sources also note that despite impressive mill capacity utilization rates (which reached 84.8% for the week ending August 7, 2021), the upcoming outages are expected to further squeeze already-tight supply lines. Other market sources say they wonder when the market will fall, and how quickly prices will fall off once that starts to happen.
“The last time we saw a market similar to this one, was between December 2007 to May 2008, when HRC prices went from $27 cwt. ($595/mt or $540/nt) to $56 cwt. ($1,235/mt or $1,120/nt), essentially doubling in the course of six months,” a source said. “Prices peaked in June 2008, and then started to slide in September. Over the course of the next 9 months, prices fell to $18.50 cwt ($408/mt or $370/nt). Who knows if this market will behave the same. On the other hand, the build time for this uptrend has been a year versus the 6-months we saw last time. All in all it’s very interesting.”