Rumors that US flats mills would announce another price increase began to swirl in early August after domestic scrap prices settled up during this month’s buy cycle. And while many believed that a flats increase in the first week of August was imminent, it never materialized.
Yet this week, with widespread belief that domestic scrap prices are all but guaranteed to trend upward again in September, many US steel producers, including flat rolled steel mills, began distributing increase announcements to customers.
The increase on flats products, including HRC and CRC, was stated at $2.00 cwt. ($44/mt or $40/nt).
And while lead times for HRC and CRC remain at 5-6 weeks and 6-8 weeks, respectively, prices have inched up slightly since the beginning of the week. At current, domestic HRC have increased from an average of $22-$23 cwt. ($485-$507/mt or $440-$460/nt) ex-mill, to $23-$24 cwt. ($507-$529/mt or $460-$480/nt) ex-mill.
Domestic CRC prices have also ticked upward, from average of $31-$33 cwt. ($683-$728/mt or $620-$660/nt) ex-mill last week, to $33-$34 cwt. ($728-$750/mt or $660-$680/nt) ex-mill. Some sources have indicated hearing prices up to $1.00 cwt. ($22/mt or $20/nt) higher for hot and cold rolled coil.
“What we’re seeing, is that service centers took their inventories a little bit too thin and there’s a lot of restocking going on,” a source said. “That, and while demand isn’t where it was before, there is more demand than the mills expected, which is a good thing.”
In terms of where the market is headed in the months ahead, panelists at the 2020 Steel Summit conference offered the following:
“It will take several years for prices to return to 2019/2019 levels,” said head of CRU steel analysis in North America, Josh Spoores. “Sheet prices are expected to remain similar to 2016 levels for the remainder of 2020 but rise slightly in 2021.”
John Anton, associate Director of Pricing and Purchasing at IHS Markit, mostly agreed. “The US will remain suppressed by COVID-19 through the rest of the year, and recovery of the steel market will take years, not months. We think prices will be mostly steady through the rest of the rest of the year. They will try to trend upward, but the underlying strength isn’t great. There should be increases next year. Some upward drift, not much.”