US sheet steel prices likely to rise further on the heels of higher scrap

Friday, 02 July 2021 23:51:24 (GMT+3)   |   San Diego
       

US scrap prices are expected to rise during this month’s buy cycle, sources note, adding that higher sheet steel prices are likely to follow.

“Prices continue to stay firm, and it feels like the mills are still holding their cards close,” a source said. “Between production problems and outages, it seems like every time the mills get close to catching up [with demand], they don’t. Believe me, the mills want to keep the market tight because it’s working for them.”

Another source agreed, adding that while it appears import prices (and sheet steel prices in the global market) have leveled off, US domestic mills “are trying to tell their customers that this is the ‘new normal’ and that this is how things are going to be going forward.”

Also of note, is that import HRC offers to the US are attracting attention from US buyers, with import HRC from Vietnam offered at approximately $76 cwt. ($1,676/mt or $1,520/nt), and from Korea at approximately $80 cwt. ($1,764/mt or $1,600/nt), both DDP loaded truck in US Gulf coast ports, well below current domestic offers.

“If you’re paying attention to what’s going on in the market in terms of pricing, and you consider that there’s a bunch of new [sheet steel] capacity that’s about to come online, and you add in the fact that Section 232 could be gone by the end of the year, it doesn’t take a rocket scientist to see where this could be heading,” a third source said.

“The storm clouds are on the horizon and everyone see it,” another source noted. “Prices are high right now and the [domestic] mills are pushing for higher, and we’re at a point where imports can come in [at price points] that are comfortably beneath domestic offers. I think a lot of customers are buying offshore, even with the prospect of Q4 arrivals, as a way to hedge and to bring their cost average down.”

For now, US flats prices remain high, and they have continued to move upward in the last week. Current HRC prices are trending at $84-$88 cwt. ($1,852-$1,940/mt or $1,680-$1,760/nt), FOB mill, against a range of $84-$87 cwt. ($1,852-$1,918/mt or $1,680-$1,740/nt), FOB mill last week.

US CRC spot market prices have also firmed in the past seven days, and are now being heard at $94-$98 cwt. ($2,072-$2,161/mt or $1,880-$1,960/nt) FOB mill, against a range of $94-$96 cwt. ($2,072-$2,116/mt or $1,880-$1,920/nt) FOB mill, a week ago.


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