The US hot-rolled and cold-rolled coil market seemed to have stabilized for the remainder of the year following mill announcements of $30/st price increases over the past week, sources said Friday.
Multiple buy-side sources had seen quotes move up for HRC and CRC products across the board from producers, and any initial skepticism surrounding the increase seemed to be dissipating.
At the beginning of the week, a buy-side source said they were unsure if the increases could be pushed through as lead times did not appear to have increased. However, as the week progressed, the buyer began "forming a different opinion."
One major mini-mill producer was being "very firm right now" and there were "definitely some buyers who got caught short," according to the buyer. "We had some customers who would not take the low-priced deals being offered last week," the buyer added.
A service center source said the announcements had spurred "a number of our customers to get off the sidelines and give us contract awards this week." New spot quotes were at $500/st and $700/st for HRC and CRC, respectively, according to the service center source. It was unclear if he had made any new transactions at the higher levels.
A second buy-side source said he was one of the people trying to get a last-minute deal following the announcements, but a mini-mill had denied the lower pricing as of Tuesday. He was still able to make the purchase at pre-increase levels from a competing mill. He said the mini-mills were pushing for the higher HRC numbers between $490-$510/st, but had seen more flexibility from an integrated mill. Overall, the second buyer viewed the increase as a positive and noted a pickup this week from his customers who were now willing to commit to orders.
A second service center source said he had not quoted much spot since the announcements, but for two separate HRC inquires, mills seemed to be "roughly at $490-$500/st," and lead times have definitely moved out.
"I think all the big volume cheap deals are all either wrapped up or off the table," he added.
Numerous buy-side sources said said this week they believe a second price increase is probable following scrap prices settling higher in November. However, the second service center source noted that a second increase could raise concerns for the first quarter if too much demand is pulled forward as buyers look to get ahead of the rising prices amid softer overall demand levels.
S&P Global Platts maintained its daily HRC and CRC assessments at $460-$490/st and $690-$700/st, respectively, as quotes were heard to be higher, but no confirmed transactions had been heard at the higher levels. Both prices are normalized to a Midwest (Indiana) ex-works basis.
