Spot market prices for US domestic hot rolled, cold rolled, and galvanized coil have remained strong since our last report a week ago, as sources throughout the US say they believe that higher prices are likely to sustain into Q1 of next year.
Current HRC spot market prices are up by about $3 cwt. ($66/mt or $60/nt) in the past week and are now trending at $51-$53 cwt. $1,124-$1,168/mt or $1,020-$1,060/nt), FOB mill, whereas CRC and HDG prices are also up by that same margin, and are now being heard at $62-$64 cwt. ($1,367-$1,411/mt or $1,240-$1,280/nt), FOB mill.
Similar to last week, many sources continue to believe that mills will likely try to push HRC spot prices up to $60 cwt. ($1,323/mt or $1,200/nt) within the next several weeks. Some believe that another price increase may be rolled out before the end of the year- especially in that domestic scrap prices appear to be settling up by $30-$50/gt this month, depending on the region or the grade.
Busheling scrap prices are expected to settle at up $50/gt once the dust settles.
“I think we’ll see [a push for $60 cwt.] before Christmas, and I think the mills may get that done,” a source said, adding that he believes that another price increase announcement is forthcoming. “The domestic mills are booked well into January, and some are booked into February.”
He was also skeptical that these new, higher prices will be around for the long term, especially in that supply / demand models have not changed.
Another source agreed.
“I think we’re seeing two things. First, people took their inventories too low, and second, mills are restricting spot availability, so the market is dealing with higher prices now that spot bookings have started to pick up,” he said. “I think the market will stay firm until imports start to show up at the start of the second quarter.”
Current import HRC offers are being heard at $43-$44 cwt. ($948-$970/mt or $860-$880/nt), whereas import CRC offers are being heard at approximately $49-$52 cwt. ($1,080-$1,146/mt or $980-$1,040/nt), both DDP loaded truck in US Gulf coast ports.
A third source questions whether this latest uptrend could be mills’ “last hurrah,” especially in that more capacity is coming online next year.
“I think we’ll see the market start to turn at the end of the first quarter of next year,” he said. “Nothing has changed on the demand side, and supply will be up.”