Today, we’ve taken a quick look at the news from Europe, China and United States on hot-rolled coil (HRC) availability, shortages, lead times and prices.
Mill margins continue to rise, while HRC futures tighten
Hot-rolled coil futures continued their march higher in the week ended March 23, as margins continued to rise while busheling scrap futures took a breather. S&P Global Platts reported today on its website.
Strong steel prices and long lead times lead to rising margins
The market remains vulnerable to large price swings as short interest continues. Bank analysts forecast that mill margins will correct in the medium term, according to S&P, but the strength of steel prices will support rising margins in the short term as lead times remain high.
High scrap price levels and rising transportation costs
Looking ahead, S&P further reports, scrap prices, which are holding at recent high levels, along with capacity coming back on line will put pressure on margins. Rising transportation costs and competition for ships to transport scrap containers are also pouring fuel on the fire.
Other interesting topics in the article
- US steel lead times
- Futures for hot-rolled coil
- Margins for hot rolled coil vs. busheling scrap spread
China’s HRC prices firm on limited supply
In the past week ending March 19, stocks of Chinese hot-rolled coil have continued to fall. Market sources report that steelmakers’ inventories in China fell by as much as 9% from the previous week and by as much as 42% from a year ago.
This does not yet take into account the declines in domestic warehouses and Chinese markets, which have also decreased substantially, according to market observers.
Maintenance and serious production cuts
To this end, many smelters have been under maintenance. Combined with the fact that production in Tangshan has been massively restricted, this is likely to further fuel HRC prices in the near future.
European coil market burdened by bottlenecks
Hot-rolled coil prices in Europe are approaching record levels in both the north and south of the continent. According to market sources, current prices are only about 40 to 60 away from the peak prices in August 2008.
Announced steel price increases by manufacturers could surpass record levels
After a slowdown in February, prices have regained their upward momentum. Full implementation of the increases announced by major domestic steel producers would result in the previous record being surpassed.
Market expects further steel shortages in Europe
Purchasers of strip steel products report continuing difficulties in material procurement. Galvanized coils and sheets in particular are in very short supply. Despite fluctuating scrap values, expectations of a future steel shortage are keeping up price pressure.
Production at ArcelorMittal Italia remains restricted. The threat of a hot end closure at the Taranto plant has been resolved. Concerns over Liberty Steel’s reliability following the collapse of its main financier add to market uncertainty.
Delivery times extend into third quarter – first reports on Q4 there
Delivery times for flat products, with the exception of heavy plate, now extend into the third quarter of 2021. And in some cases steel product lead times extend into the fourth quarter. Mills offers are limited to contract business and regular customers. This pattern is repeated throughout the supply chain.
Steelnews.biz constantly searches the Internet for important, interesting and informative news.
Are you missing an information, do you have a question or are you interested that we refer to a certain article or press release of Steelnews.biz? Then simply contact us now.
We always try to refer to the correct source of a news item.
Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.