Spot market prices for US domestic HRC and CRC have climbed yet again, sources note, and while higher week-over-week prices are hardly a new phenomenon, what is new is the speed at which prices are jumping. For example, whereas HRC and CRC prices climbed by approximately $5.00 cwt. ($110/mt or $110/nt) between late March and late April, prices between late April and early May are up by “at least $7.00 cwt. ($154/mt or $140/nt), if not more.”
Multiple market sources have indicated that the continued pricing upticks are being driven by several factors, including still-rising scrap prices, strong demand, long lead times, limited availability of imports and still-hard-to-come-by spot tons.
“The big question is when consumers will reach their tipping point,” a source said. “We’ve heard that in China, there are some construction companies that have said they’re not going to buy steel at current levels, because they bid projects at X, but now steel prices are coming in at XY, and they’re holding off on buying and they’re not going to buy steel until the price makes sense. The consumers are saying it doesn’t make sense to carry out the transaction because they still have other expenses, like paying their employees, paying for insurance, and steel pricing is getting out of hand. If this is starting to happen in China, it’s only a matter of time before other places start doing the same.”
This week, US HRC spot market prices have climbed to a historical $77-$79 cwt. ($1,698-$1,742/mt or $1,540-$1,580/nt), FOB mill, against a range of $74-$77 cwt. ($1,631-$1,698/mt or $1,480-$1,540/nt), FOB mill, a week ago.
Current CRC spot market prices are now trending at $87-$89 cwt. ($1,918-$1,962/mt or $1,740-$1,780/nt), FOB mill, against a range of $84-$87 cwt. ($1,852-$1,918/mt or $1,680-$1,740/nt), FOB mill, a week ago.
This is a stark contrast to late May 2020, when HRC prices were heard at $24-$25 cwt. ($529-$551/mt or $480-$500/nt), FOB mill, and CRC prices were trending at $32-$34 cwt. ($705-$750/mt or $640-$680/nt), FOB mill.