Sources close to SteelOrbis have indicated that although US HRC prices have trended mostly stable since our last report a week ago, HDG and CRC prices have trended downward.
Consequently, HRC prices have remained at $52-$54 cwt. ($1,146-$1,191/mt or $1,040-$1,080/nt), FOB mill, while CRC and HDG have softened by $0.50 cwt. ($11/mt or $10/nt) to an average transaction range of $64-$66 cwt. ($1,411-$1,455/mt or $1,280-$1,230/nt) FOB mill.
Some market players feel that domestic mill lead times (which are currently at roughly 4 weeks for HRC and 5-6 weeks for CRC) are among the greatest indicators of where the market is heading. They also believe that HRC, despite holding sideways in the past seven days, is still the weakest product, whereas galvanized appears to be the strongest.
“Clearly the sheet market has gone sideways and is experiencing downward pressure, especially on HRC and CRC,” a Midwest source stated. “Business is fairly brisk on coated and there has not been much spot availability this quarter. If you can find spot coated, lead times are well into March. My crystal ball is never very clear, but I think there will be modest price erosion the rest of Q1. In my opinion Q2 is much more worrisome.”
A second source believes that prices could fall into the low $40s cwt. by the start of April, while a third said he believes the market has already peaked and is about to enter a slow downward trek.
Additional clarity is expected by the start of the second week in February, after mills announce settled scrap prices for next month’s buy cycle. Although it’s largely held that weather-related factors will prevent prices from coming down, some believe that mills may be successful in buying prime grade scrap at slightly lower prices than they paid in January.