The hot-rolled coil ( HRC ) price in the United States was largely unchanged in a quiet spot market, sources said, pointing out that concerns on a resurgence in Covid-19 cases was stopping buyers from purchasing more steel.
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $23.56 per hundredweight ($471.20 per short ton) on Wednesday July 15, little changed from $23.47 per cwt on Tuesday and $23.53 per cwt one week earlier.
Market participants indicated mill lead times were between two and six weeks.
Heard in the market***
Inputs were received in a range of $22-25 per cwt, with the spread narrowing from $5 per cwt the previous day.
The lower end of the range represented offers for large orders (at least thousands of tons) or from electric-arc furnace (EAF) mills with short lead times, while the higher end represented offers from integrated mills.
Prices from EAF mills have been particularly under pressure due to a decline in July scrap prices, with scrap being the primary feedstock for EAF-based flat-rolled steel producers.
Sources are split about the market outlook.
Some sources indicated that the resurgence of Covid-19 cases across the US has made their customers increasingly hesitant to buy.
But others told Fastmarkets that the Covid-19 situation was unlikely to put another “pause” on the steel industry, since their business has remained busy.
Indeed, total daily carbon steel shipments increased by 8.2% sequentially in June, KeyBanc Capital Markets analyst Philip Gibbs said in a research note on Wednesday, citing data from the Metals Service Center Institute (MSCI).
But Gibbs also questioned the sustainability of such a recovery, since June shipments were still down by 23% year on year.
Second-quarter daily carbon steel shipments were down by 28.4% from the first quarter versus typical seasonality of a 1.5% increase, Gibbs added.
Quote of the day***
“[I am] very concerned about another plant shutdown [from my customers] because of Covid-19,” one Midwest service center source said. “Prices are down, [while] service centers
[are] trying to get any business they can get.”
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