US hot-rolled steel coil prices rose further Wednesday as lead times at US sheet mills continued to extend, according to market sources.
The daily Platts TSI US HRC assessment was calculated at $706.50/st Wednesday, up $2/st from Tuesday.
A US service center source reported a recent transaction for less than 150 st at $720/st, while a second service center source said he was seeing pricing closer to $730-$740/st following the $30/st price increase recently announced by domestic producers.
"Mills are busy and HRC prices seem very firm," the second service center source said, adding that he sees more upside potential for pricing.
"People are talking about $800/st HRC. I would have thought they were insane 30 days ago, but now it's not so far off," he said.
HRC demand is strong and there has been enough trade action to scare most importers away from the US market for the time being, the first service center source said.
With strong demand from the energy industry and more buyers looking to max out contract purchases, average HRC delivery lead times have jumped with a number of mills heard to be full through March or requiring customers to inquire for delivery dates. Average current HRC lead times were at 8.08 weeks Wednesday, up from 6.13 weeks January 24, according to an analysis by S&P Global Platts.
HRC availability is tight at US mills, but is dependent on the item, a third service center source said. Lead times seem to be more extended at integrated mills and high-carbon availability is tight, he said. Average cold-rolled coil and hot-dipped galvanized lead times also jumped week over week to 8 weeks and 8.75 weeks, respectively. This compares with average CRC lead times of 6.5 weeks and average galvanized lead times of 7.42 weeks on January 24.
Value-add demand and pricing has not been as strong as what the HRC market has been experiencing, but it is unlikely that CRC or galvanized prices would see a downturn in the near future, the second service center source said.
The daily Platts TSI US CRC assessment was calculated at $860.25/st Wednesday, stable on day. A small-volume transaction was reported at $900/st, while some offers continued to be heard below that level, depending on the mill.
"I think if we start to see HRC stabilize a bit then we'll see CRC and galv firm up a bit further," the second service center source said.
The combined Platts TSI price index uses a volume-weighted average calculation - according to TSI's standard - to determine value on an ex-works Indiana basis.
