Spot market prices for US domestic hot rolled, cold rolled, and galvanized coil have risen yet again, and many within the marketplace wonder if another price increase announcement is on the horizon.
Current HRC spot market prices are up by another cwt. $1.00 cwt. ($22/mt or $20/nt) in the past week and are now trending at $52-$54 cwt. ($1,146-$1,191/mt or $1,040-$1,080/nt), FOB mill, whereas CRC and HDG prices are up by $2.00 cwt. ($44/mt or $40/nt) since our last report, and are now being heard at $64-$66 cwt. ($1,411-$1,455/mt or $1,280-$1,320/nt), FOB mill.
This week’s hot rolled coil prices are “within spitting distance” of the minimum $55 cwt. ($1,213/mt or $1,100/nt) HRC base price set by Nucor in their late-November increase announcement.
Similar to previous weeks, many sources still believe that mills will try to push HRC spot prices up to $60 cwt. ($1,323/mt or $1,200/nt) “sooner than later,” especially in that busheling scrap prices settled up by $50-$90/gt this month, depending on the region.
“Certainly, prices will be solid through Q1, [but] I am not so confident about prices staying firm through Q2,” one source said, adding that he has a gut feeling that current price points are unlikely to last. “Demand remains pretty good, but high interest rates and continued talk of a recession (soft or hard landing) cannot be ruled out.”
Also worth keeping an eye on, is SteelOrbis’ reporting from earlier this month that Mexico-based AHMSA might restart steel production in February 2024.
Per that report, New York-based investment fund Argentem Creek Partners (ACP) has asked its partners to formalize a loan request of up to $600 million from “several institutions.” A source close to the negotiations told SteelOrbis that if the loan is approved and there are no contingencies, AHMSA could be starting steel production in approximately 2 months.
Yesterday, however, SteelOrbis learned that a MX federal judge blocked a Dec. 21 shareholders meeting that had been scheduled to formalize the agreement allowing ACP to take over the mill. According to that report, the judge said AHMSA shareholders are prohibited from taking this type of action while the company is engaged in bankruptcy proceedings.
If that vote does not take place, Argentem cannot take control and restart production.
Other sources have said that this back-and-forth feels like “more of the same,” and that there have been so many rumors as to whether the mill will actually restart that “they’ll believe it when they see it.”
Should AHMSA restart operations in Q1 of next year, this will “absolutely place downward price pressure on sheet.”