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US Hot Rolled Coil Prices Are Gaining Gradual Ground
US Hot Rolled Coil Prices Are Gaining Gradual Ground

US Hot Rolled Coil Prices Are Gaining Gradual Ground

  • 08-Feb-2023 3:34 PM
  • Journalist: Harold Finch

Texas (USA): in the ongoing week, Hot Rolled Coil (HRC) prices are rising, owing to a consistent price increase by the major HRC manufacturers, despite the withdrawal of trading activity by some buyers from the spot market. According to market participants, there is a significant difference in mill-to-mill prices and therefore, price indices have limited purpose. Cleveland-Cliffs has raised its spot market prices for HRC, Cold Rolled Coils, and coated sheet products. The company has been raising the price of HRC by USD 55/MT and setting the base price at USD 934/MT. All new orders will be subject to an immediate price increase. Manufacturers claim that demand for the HRC from the downstream auto industry was strong in January and that they are noticing persistent improvements in almost every downstream industry into which they sell.

According to our sources, ArcelorMittal USA, NLMK USA, and Nucor have raised their flat-rolled steel prices by USD 55/MT. Only NLMK USA published a minimum price, setting HRC offers at USD 961.3 per MT. Other major US steelmakers have announced similar price surges in recent weeks. The US Midwest HRC ex-works assessment has increased by 25% since the end of November, to USD 858/MT on January 31, a growth of USD 170/MT. Some service centre sources are optimistic that the announcements will continue to drive an upward cycle that began in late 2022, while others are concerned that steel mills are overheating the market and that service centre inventories may become overvalued.

Some market participants were surprised by Detroit mills' comparatively early bid announcement, though an upward push was widely expected this month due to limited scrap availability, firm downstream inquiries, higher HRC prices, and robust export activity. A price gain in February would deviate from the month's historical trend of flat-to-knock-down prices. Historically, February has been the year's slowest month for tax collection, in large part because of the colder temperatures and snowfall in the West, Midwest, and Northeast of the US.

As a result of Steel manufacturers' strong determination to keep HRC prices at higher levels, ChemAnalyst anticipates that HRC prices will exhibit an upward momentum in the short term. The HRC market is likely to remain buoyant in the coming weeks as a ripple effect of rising raw material costs, improved market dynamics, and increased market players' determination.

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