The US Hot-Rolled Coil Prices Shoot Northward for the First Time Since July 2023

For the first time since July, US hot-rolled coil (HRC) prices have seen a surge. This price elevation coincided with Cleveland-Cliffs' announcement of a price increase, and this trend persisted despite the ongoing auto strike. As per an assessment, the US HRC Midwest and the southern regions experienced a hike of $30/st, settling at $700/st ex-works. This increment was fueled by mills reporting recurrent transactions at this revised price, with quantities ranging from 100-500st. Both the integrated steel producer Cliffs and its competitor Nucor were reportedly quoting a higher $750/st.

There has been a noticeable extension in lead times from 5 weeks to 7.2 weeks. Mills are now reportedly scheduling bookings as far ahead as mid to late November. This elongation in lead times is attributed to mills accommodating low-priced, high-volume deals that were majorly concluded under $650/st.

The market was taken aback by the abrupt price surge and Cliffs' preceding announcement. While price escalations were anticipated, the general sentiment was that these would follow the resolution of the ongoing strike by the United Auto Workers (UAW) against the trio of top US automakers. This is because the resolution is likely to bolster the steel demand linked with the auto sector.

Even though the prices have soared, there hasn't been a parallel increase in downstream demand. The extended lead times are primarily driven by service centers intending to replenish their stocks after maintaining a minimalist inventory throughout the year. Given the price volatility seen during most of the year, service centers have remained wary of purchasing surplus material.

The UAW strike, targeting Ford, General Motors, and Stellantis, has been escalating, and its repercussions are becoming a growing concern within the market. As the strike prolongs, apprehensions are mounting about its potential to dampen steel consumption. At present, six major assembly plants and 36 parts distribution centers are affected by the strike. Meanwhile, despite these domestic fluctuations, the HRC import assessment in Houston remained stable at $680/st, as Asian markets took a hiatus for holidays.

According to the article by Procurement Resource, US hot-rolled coil (HRC) prices have risen for the first time since July, influenced by Cleveland-Cliffs' price increase announcement. This rise occurred despite the ongoing auto strike. The Midwest and southern regions of the US saw a $30/st jump, reaching $700/st. Mills have reported consistent transactions at this new rate.

Lead times extended from 5 to 7.2 weeks, with mills booking into late November. This shift is due to mills finalizing deals below $650/st. The market was surprised by this surge, especially with the ongoing UAW strike against major automakers. Despite the price increase, downstream demand remained stable. The UAW strike against key auto manufacturers is intensifying, raising concerns over steel consumption impacts. However, the HRC import rate in Houston remained unchanged at $680/st amidst Asian market holidays.