HRC Weekly Recap: Mart Faces Dueling Factors | American Metals Market
Hot-rolled coil prices in the United States will come under downward pressure from imports and declining automotive demand in the coming months, but it remains to be seen whether this will be enough to offset the impact of the next few. breakdowns for plant maintenance, according to market players.
Fastmarkets’ daily hot-rolled steel coil index, fab mill US, averaged $ 96.75 per cwt ($ 1,935 per short ton) for the week ended Friday, September 3, up from 0 , 30% from $ 96.46 per cwt the previous week and more than triple the $ 26 per cwt recorded in the equivalent week last year.
This is the highest weekly average recorded by Fastmarkets since 1960, surpassing the previous week’s record and marking the 32nd consecutive week of records.
Heard in the market
The shipping dates for the reported transactions were from late September to mid-October, meaning delivery times have narrowed to around four to eight weeks.
Market participants remained divided on when this price rally will run out of steam. Some sources said they continued to see a lack of cash availability and were concerned that plant outages scheduled for September and October would further constrain supply to the market. Some do not expect a significant price correction until next year.
However, a growing number of sources believe prices could stabilize soon after nearly doubling since the start of this year, given a price cap from HRC already in the second half of August. Some have reported that closing auto assembly plants due to semiconductor chip shortages has made steel more accessible. While they acknowledged that plant maintenance shutdowns in September and October could support HRC prices in the short term, they said the equipment should become more available than in November and December.
Higher import volumes are also expected by the end of the year. Some distributors and consumers have purchased imported products because foreign materials are, on average, about $ 400 per short ton cheaper than domestic materials. A growing number of foreign steel producers are looking to locate in the United States because hot-rolled coil prices in North America are higher than elsewhere, sources said. The gap between HRC’s import prices and domestic prices is wide enough that some buyers are willing to ignore delivery delays and transport bottlenecks, according to market participants.
Quote of the week
“Hot rolled offers are coming from everywhere [the world]Said a West Coast trader. “The prices are so high here compared to elsewhere that we will continue to see other foreign producers trying to take advantage.”
Dom Yanchunas, Rijuta Dey Bera and Mark Shenk, all in New York, contributed to this report.