US domestic flat steel pricing was largely flat on the week, as finished steel demand from the automobile and other flat steel sectors remains limited, and as scrap pricing for the month of November is now talked sideways to lower at best, market insiders told SteelOrbis this week.
The weekly market assessment differs from that of the week of October 21, when HRC pricing was sharply off as mills, facing continued low demand, offered aggressive discounts to customers to help move finished steel supply and clear inventory, market insiders said. Insiders said many mills were discounting to service centers to meet contract minimums since “business remains so poor.”
“I’m hearing that pricing is largely flat on the week as I’m not hearing anything different,” said one US Gulf Coast-based flat steel market insider. “Our operations right now are focused on generating cash flows, so the focus is not so much on spot pricing.”
“I have not heard pricing from my clients, but I have heard anecdotes on demand, and nobody is sounding happy about how the year is ending,” one Mid-Atlantic-based steel market analyst told SteelOrbis. “They aren’t anxious to buy steel because they are not thrilled about how much finished product (white goods, parts, buildings, random widgets and gadgets) their company is selling. I have been describing demand as ‘tepid’ but maybe changing the tune to ‘weak,’” he added. “Hailstones aren’t falling, but it is drizzling at minimum and (it) may be starting to light rain,” he said.
The weekly SteelOrbis spot average for HRC remains steady at $660-680/nt ($728-750/mt), or $33.00-34.00/cwt., though off nearly seven percent from the week of October 7, when a previous $715-725/nt ($788-799/mt) or $35.75-36.25/cwt. delivered-to-customer range was noted. Lead times for HRC are noted at 4-6 weeks, indicating markets are well supplied amid limited new spot market demand, insiders said.
“It’s definitely slow from a demand perspective, and the automotive steel sector (stinks),” said another Midwest scrap market insider. “Nothing is going to happen until after the election, and depending on who wins will probably determine what next year will look like (for steel). If things are this bad under Biden-Harris, if she gets elected, then next year scares me. Truly, I feel like we are in a ticking time bomb right now. It’s either going to go off after this election or be diffused.”
Following two weeks of steady pricing, steelmaker Nucor increased its Consumer Spot Price (CSP)-the price it charges for HRC across all of its mills- by $20/nt ($22/mt) on an FOB basis to $740/nt ($816/mt). On October 14, the steel maker reduced its CSP by $10/nt ($11/mt) to $720/nt. The mid-October price cut was the first announced since the weekly monitor was reduced from $670/nt ($737/mt), or $33.50/cwt., to $650/nt (717/mt) or $32.50/cwt. on July 15. Before the recent price cuts, Nucor prices had been generally advancing prices or they were being reported flat week to week.
In other flat steel markets, CRC is last assessed steady at $940-950/nt ($1,036-1,047/mt), following last week’s $10/nt ($11/mt) weekly delivered basis spot price decline. HDG prices remain flat at $870-880/nt ($959-970/mt) or $43.50-44.00/cwt. delivered, compared with an average of $885/nt ($976/mt) two weeks earlier, market insiders said.
Recent renewed mill discounting programs, now makes sense to many since scrap pricing has turned sideways at best to lower for November. Insiders told SteelOrbis mills now plan to concentrate on improving their internal margins by using their own scrap operations to leverage lower scrap pricing as the markets move through the fourth quarter. They expect many mills could “come out hard at the start of the new year” and as a result, scrap prices are likely to jump.