Hot Rolled Coil Prices are on Spirailing Wheel in the US Market

Hot Rolled Coil prices in the US market rose for the sixth week as mills persisted in pushing spot market quotations higher, although at a slower pace. Domestic weekly assessments of the United States Hot Rolled Coil for the Midwest and Southern increased by USD 55/MT this week and settled at USD 1265/MT. According to market participants, Hot Rolled Coil prices have ascended by roughly 80% since late November, and lead times in the Midwest decreased from 8 weeks to 6-8 weeks, with a few mills reporting end-of-April delivery and the majority of mills reporting end-of-May delivery.

According to our sources, integrated steelmaker Cleveland-Cliffs raised its minimum Hot Rolled Coil price by 8.3% on Monday, lining up with an Electric Arc Furnace (EAF) Steel manufacturer and rerolled NLMK USA. According to major players, rising scrap prices have not kept up with monthly Hot Rolled Coil price gains. With the soaring domestic Hot Rolled Coil prices, the import assessment into Houston rose by USD 90/MT. However, the imported material had lead times in July and August.

Demand has held steady for longer than the market had anticipated. The hikes in interest rates have caused some problems in the banking industry; they have not yet significantly impacted the country's still-strong economy. In light of the tight supply and decreased steel mill utilization rates, many people are looking for additional steel. Lower service center inventories mean buyers have less to buy from competitors, and many players cited a shortage of certain steel products in their inventories.

Steel mills with new production capacities, such as Steel Dynamics, Inc (SDI) Sinton and Nucor's expanded Gallatin mill in Kentucky, still perform below expectations, though both companies expect better results in the second quarter. Several short-term steel mill outages also affect the US market from March to May, with the majority occurring within the next 4-6 weeks. Thus, ChemAnalyst anticipates US Hot Rolled Coil prices to stay stable in the coming weeks. Despite the long lead times, buyers may be able to obtain the necessary stockpile from the overseas market. Several issues have raised concerns about how long the present rally can last.