Over the past two weeks, ex-works US hot rolled coil (HRC) prices have halved compared to plate prices for the first time in US steelmaking history.
Historically, pickup and delivery hot rolled steel prices have fluctuated within $100/t, with sheet typically lagging behind HRC. New trends in the market emerged in the midst of the Covid-19 pandemic when the cost of steel sheet fell $200 below HRC prices. Since then, the spread between the two has grown to $950, more than double HRC's spot prices.
The thick plate market, which is much smaller in the US than the hot-rolled steel market, which has only three major manufacturers, kept prices high at the expense of mills that refused to sell cheaper.
Today, hot-rolled coil prices are down 44% to $895 per ton, driven by lower demand and chronic oversupply in the market. Buyers are wary of buying steel as steel prices have plummeted since mid-September.
Nucor, one of the world's largest sheet steel producers, lowered its ex-works sheet prices by just $50 to $1,860 per tonne on May 19, and has maintained prices ever since.
A gaping spread and cheaper imports many hundreds of dollars below domestic prices have fueled concerns that flat steel prices could soon correct sharply downwards.
The launch of Nucor's new 1.2 million plate per annum electric arc furnace (EAF) plate mill in Brandenburg, Kentucky later this year could be a turning point for price cuts as new shipments are likely to also pressure on the old facilities for the production of thick plates. market.
