(HSV VIETNAM GROUP) – Cleveland-Cliffs announced in early November that it would seek a minimum base price of $1,000/ton for HRC.
The return to four-digit prices happened quickly and began even before the United Auto Workers (UAW) union strike against the Big Three in the Detroit area was resolved.
Below is a timeline of Cliffs' target HRC price since the spot steel plate market bottomed out in late September:
September 27: 750 USD/ton
October 19: 800 USD/ton
October 31: 900 USD/ton
November 7: 1,000 USD/ton
That November announcement is important because $1,000/ton is a nice round number. We have approached or exceeded that level only once before the pandemic. The most recent examples occurred after Section 232 tariffs rocked markets in 2018 and just before the 2008 financial crisis.
Since 2021, we have seen HRC at or above $1,000/ton consistently, most recently last spring.
According to steel market survey results, we also continue to see service centers increase prices in parallel with factories. That shows there is also purchasing power downstream. 76% of service center respondents told us they were raising prices, the highest we've seen since the first quarter—when we also saw a spike in panel prices in the US.
Here's what some people who thought prices would go higher had to say:
"The UAW strike is over and demand has remained steady over the past four months. Factories see an opportunity to increase prices as demand will increase historically in the first quarter."
“Overseas supplies are limited until February.”
"Too many people sat on the sidelines waiting for the fallout from the auto strike, and factories in general have done a good job of restraining supply given the short-term impact of the strike. It will take several more months for inventories to return to balance and allow prices to stabilize."
Peak at the end of quarter 4/2023 or end of quarter 1/2024?
Plate prices have fluctuated so much over the past three years that I cannot predict what HRC prices could achieve. Instead, I will focus on when the price might peak.
According to our survey data, opinions vary somewhat on that question. 35% of survey respondents think US HRC prices won't peak until February or later, but 27% think prices will peak in December.
Ha Diem HSV