The US flat rolled steel market is once again stable, as weak US economic data and rising energy prices did little to spur steel buyer interest this week, sources told SteelOrbis.
“The lackluster GDP report and rising energy costs kind of clouds the outlook for an overall advancement in steel prices,” one Texas-based contact told SteelOrbis. “Buyers, especially the larger ones that purchased flats in the sub-$40s, can afford to sit it out for a while and wait for lower prices.”
This week’s average US domestic spot HRC price range remains unchanged at $40.50-$42.50 cwt. ($893-$937/mt or $810-$850/nt) FOB mill, with lead times steady at 3-7 weeks.
US economic growth was reported Thursday at levels considered weaker than Wall Street estimates. Data from the US Department of Economic Analysis indicated gross domestic product for the first quarter of 2024 -a broad measure of all goods and services produced in the January-through-March period-increased at just 1.6%, against a Wall Street estimate calling for a 2.4% gain. Consumer spending rose 2.5% for the first quarter of 2024, also off from an expectation for a 3% gain. Consumer spending rose 3.3% during the fourth quarter last year.
On the energy front, West Texas Intermediate (WTI) crude oil, the US benchmark, stands at $85.57 per barrel (/bbl), up from $78.76/bbl one year ago, though off from a high of $123.70/bbl posted on March 8, 2022. Nationwide average retail mid-grade gasoline prices stand at $3.791 per gallon, up from $3.751/gal last week and $3.769/gal one year ago.
Meanwhile, CRC and HDG spot market pricing was flat to last week’s level at $55.00 cwt. ($1,213/mt or $1,100/nt) and $53.00 cwt. ($1,168/mt or $1,060/nt) FOB mill, respectively. Lead times for both are steady at 6-10 weeks. Market insiders tell SteelOrbis galvanized spot markets remain “a bit tight” though prices continue to be flat with sellers preferring hold off on quick sales in case prices rise in the last week of the month.
“It’s fairly quiet right now, with the overall sentiment flat and cautious,” a sidelined buyer told SteelOrbis. “It’s a bit tenuous right now, with sellers’ big ideas about prices being 50 cents higher just kind of drifting in the wind.”
Price offers from producing mills were also reported steady to slightly higher on the week with Nucor’s CSP for HRC reported at $41.75 cwt. ($920/mt or $835/mt) with 3-5 week lead times also unchanged. No new offers were heard from Cleveland Cliffs since their second HRC offer earlier in April at $45 cwt. ($992/mt or $900/nt), FOB mill gained little traction, with most transactions at or below $42.50 cwt. ($937/mt or $850/nt), FOB mill.
On the scrap front, sources tell SteelOrbis the most likely scenario for scrap next month (May) continues to be sideways to April price levels, with a potential for higher prices possible for bushelling grades.
“We could see perhaps increases of $10-$20/gt as a result of higher bushelling values,” a source told SteelOrbis.