US flat steel markets were mixed this week amid limited new spot trading activity, ahead of an expected October 1 dockworker strike at key US ports, which if it occurs, could disrupt imports and exports of containerized finished steel and steel scrap shipments through ports on the US East and Gulf Coast, market insiders told SteelOrbis this week.
This week’s assessment differs from that of the week of September 16 when flat steel prices rose as ongoing planned and unplanned mill outages for September reduced available flat steel supply. Supply reductions, insiders told SteelOrbis, prompted those mills that had spare capacity to ramp up their utilization rates to make up for any planned or unplanned shortfalls to maintain cash flow. Market insiders said this week that 16 plants are scheduled for outages during October, down from 17 in September.
On the mill side, while a weekly price increase from steelmaker Nucor was announced on September 23, with prices up $10/nt (11/mt) to $730/nt ($805/mt) or $34.50/cwt., most reported spot transactions are done more than $20/nt (22/mt) less than the Nucor price. Average spot HRC prices reported to SteelOrbis were actually down slightly on the week.
The SteelOrbis HRC price average is assessed at $700-710/nt ($772-783/mt) or $35-35.50/cwt., down $5/nt from last week’s $700-720/nt ($772-794/mt) or $35-36.00/cwt., delivered to customer range.
Most contacts polled by SteelOrbis say Nucor will often raise its Consumer Spot Price (CSP) for hot-rolled coils to prevent further price declines in the day-to-day spot markets. Cleveland Cliffs, a key competitor of Nucor, announced the price of its HR coils would be $750/nt “effective immediately,” the steelmaker said September 17 letter to its customers, citing “ongoing market developments.”
“The mills have gotten pricing off the floor of $32.00/cwt. ($640/nt or $705/mt) from a couple of months ago, but it has been a slow, arduous climb,” said one SteelOrbis market insider. “The trend has been up for two weeks, down for a week, up for two weeks, down for a week. It’s kind of like climbing a sand dune.”
And while domestic finished steel demand and available supply remains little changed from last week, the potential for severe market disruptions to the import and export of steel and scrap starting next Tuesday with the threatened strike, has some market insiders considering creative workarounds to prevent what’s hoped by most to be a short term inconvenience.
“We’re hearing that scrap exporters are shipping their supply to bulk exporters to get around the containers they normally would use,” said one SteelOrbis market insider. “Obviously, the nearer to the East Coast and Gulf Coast ports you are, the better off you will be from a price perspective.”
Industry reports indicate many shippers are utilizing rail to divert overseas shipments to US West Coast ports unaffected by the strike. Shipping company contacts told SteelOrbis this week they expect increased rail congestion, especially at the Chicago and Central Canadian-based rail yards that interconnect with the West Coast. “They can either re-route, or wait it out,” one shipping contact told SteelOrbis. Container congestion at West Coast docks, so-called “dwell time,” was unchanged this week at nine-plus days, shipping reports say.
In the cold-rolled market, prices were up about $5/nt ($5.51/mt) on increased buyer interest to $950-960/nt ($1,047-1,058/mt) or $47.50-48/cwt., delivered to customer, insiders said. HDG continues its recent price climb, posting a $15/nt ($16.53/mt) rise to $890-900/nt ($981-992/mt) or $44.50-45/cwt on a delivered to customer basis, market insiders said.