US hot-rolled coil pricing sharply lower on aggressive mill discounting programs as demand wanes

Friday, 25 October 2024 22:58:18 (GMT+3)   |   San Diego

US domestic HRC pricing was sharply lower this week as mills, facing continued low demand, offered aggressive discounts to customers to help move finished steel supply, market insiders told SteelOrbis this week.

“The market’s a mess,” commented one flat steel market insider. “As a result, many mills are discounting to service centers to meet contract minimums since business is so poor. From what I’m hearing, there’s a lot of 500-ton plus HRC deals getting done at $33.00/cwt.”

Another contact hadn’t heard pricing quite so low. “I am not hearing $33/cwt. getting done, but I think $34/cwt. is obtainable,” he said.

The weekly SteelOrbis spot average for HRC now stands at $660-680/nt ($728-750/mt), or $33.00-34.00/cwt., off nearly seven percent on the week from a previous $715-725/nt ($788-799/mt) or $35.75-36.25/cwt. delivered to customer range.

“I believe those numbers,” said another SteelOrbis flat steel market insider, commenting on the large weekly decline. “Mills are being pretty aggressive to move inventories, especially at this time of the year.”

On the mill front, Nucor kept its posted Consumer Spot Price (CSP) unchanged for a second week on October 21 at $720/nt (794/mt) or $36.00/cwt., FOB mill. On October 14, the steel maker reduced its CSP-the price it charges for HRC across all of its mills- by $10/nt ($11/mt). 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 or being reported flat week to week.

In other flat steel markets, CRC is last assessed at $940-950/nt ($1,036-1,047/mt), off about $10/nt ($11/mt) on a delivered basis from levels seen seven days ago. HDG prices also fell an average of $10/nt ($11/mt) to $870-880/nt ($959-970/mt) or $43.50-44.00/cwt. delivered, compared with an average of $885/nt ($976/mt) seven days ago, market insiders said.

Recent renewed mill discounting and sharply lower pricing flies in the face of recent sideways to higher scrap prices for October, especially since November scrap is last called strong sideways to potentially as much as $30/gt ($30.48/mt) higher in the Chicago/Detroit markets, scrap insiders told SteelOrbis this week.

During the October buy cycle, scrap prices rose on better demand from domestic mills as more downed units emerged from planned maintenance outages. Most grades increased an average of $20/gt ($22/mt) in the US Ohio Valley and Southeast in reaction to rising billet prices in overseas markets and recent stimulus activity by China. Despite higher prices elsewhere, scrap markets in and around the Chicago/Detroit area were settled mostly sideways to September, scrap insiders said.


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