US HRC market dwindles due to shaky demand dynamics and various strikes
U.S. hot rolled coil (HRC) prices witnessed a decline on September 12, 2023 amid uncertainties related to demand, especially with a potential strike at three significant US automakers on the horizon.
Prices for the U.S. HRC in both the Midwest and southern areas decreased by $30/st, settling at $690/st ex-works. This represents the most significant drop since the beginning of 2023 and shows a 43% decrease from the high in April.
Request Access To The Latest Price Trends of Hot Rolled Steel Coil
Offers were generally in the range of $680-700/st, but many were hesitant to engage in spot market purchases, largely due to uncertainties about future demand. Large discounts surfaced for quantities ranging from 2,000-20,000st. The lowest price for the more extensive volume category was quoted at $610/st, although no confirmed deals emerged from this rate. Lead times were consistent, hovering between 4-5 weeks.
The market's attention is focused on the potential decision by the United Auto Workers (UAW) to initiate a strike against some or all of the "Big 3" automakers by the end of 14 September. If strikes occur at Ford, General Motors (GM), or Stellantis, this would dramatically reduce the consumption of materials like steel, aluminum, and other metals integral to car production. The UAW president, Shawn Fain, is set to provide an update by Wednesday.
Reportedly, negotiations between the automakers and the union remain strained. The UAW's primary demand is a wage increase of 40%, whereas Stellantis has proposed a maximum base wage hike of 14.5%. Offers from Ford and GM met with rejection by the UAW.
Read More About Hot Rolled Steel Coil Production Cost Reports - Get Free Sample Copy in PDF
The most significant implications for steel consumption are anticipated in the Midwest due to the concentration of the concerned auto plans in this area. Notably, other automakers, such as Honda and Toyota, would not be impacted as their workforce isn't unionized.
According to the article by Procurement Resource, on September 12, 2023, U.S. hot rolled coil (HRC) prices dwindled amidst looming uncertainties in demand, particularly due to a potential strike by the United Auto Workers (UAW) at major US automakers. While prices have dropped significantly from the year's high, the market awaits the UAW's decision which could further impact material consumption in the auto sector. Negotiations between automakers and the union remain contentious. The outcome of these negotiations will notably influence future demand and pricing in the steel industry.
