The price spread between steel hot-rolled coil and cold-rolled coil in the US market continued to widen on Friday as domestic CRC supply remained tight, market sources said.
However, buyers noted increased interest in import offers on the back of higher domestic CRC prices and extended lead times.
Platts increased its daily CRC price assessment to $560-$580/st from $550-$570/st. HRC prices were flat at $395-$420/st. Both prices are normalized to a Midwest (Indiana) ex-works basis.
Based on current assessed price midpoints, the spread between the two products is $162.50/st, well above the typical gap of $100-$120/st. The divergence of the two products looks to continue in the near term, according to sources, as the HRC market remains stagnant but domestic supply tightness and healthier end-use demand remain in force for CRC and hot-dip galvanized sheet. Lead times for CRC and HDG are out into April and pushing into May from most US mills, narrowing the timing gap with import deliveries that are currently out to May/June.
"I am at a loss [to explain] the spread," said one US service center source regarding the large domestic HRC and CRC price difference. He added that general CRC import prices are around $440/st landed, and demand for new import orders has led to modest bookings.
The service center source also cited mills delaying bookings as they await pricing clarity.
Another distributor referred to the HRC/CRC pricing spread as "insane" but said his business had been picking up, a sign of tightness at the mill level. However, he said customers are still lagging on orders and not yet willing to pay the higher prices on new orders.
He added that new import offers on CRC were attractive as he viewed prices as staying in a narrow band for the next three to six months. However, domestic HRC pricing remains too low to generate import interest with a recent HRC order as low as $390/st ex-works.
A third service center source said he was not actively buying HRC spot but had recently picked up some HDG at base substrate prices of $580-$600/st.
Pricing for CRC was still under $560/st from one US mill, according to a fourth service center source, but another mill was at $570/st. He indicated that he had not seen HRC pricing fall below $400/st and was still at $400-$410/st for his HRC orders.
