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Fundamental Report

Supply-Side Takeaway:

Imports remain elevated (next week will give us the first look at May), as we move out of spring maintenance season with domestic production at its lowest level since late January. Domestic spot prices are clearly losing their upward momentum and will likely test their previously held floor of $800 with global prices starting to trickle higher.

The Domestic – Global HRC price differential widened further, mainly due to the domestic spot price increasing more than the rising global average. For imports, preliminary data for April arrivals indicate a continued trend higher. However, the increase in arrivals from March to April show some easing, potentially suggesting that this may be the peak for imports. Meanwhile, domestic production retreated further, reaching the lowest level since January.

HRC Spot Prices – US Domestic & Global

  • The global HRC spot price rose by another dollar to $695. This week the increase was primarily due to China increasing by $3, and Korea gaining $2, while Europe also gained $1.
  • The Domestic – Global HRC spread expanded further, this time widening by $4 to $140.

 

Total Sheet Imports (s.ton)

  • Imports estimated sheet arrivals for April indicated a continued trend higher for imports, climbing to 987k from March’s final census figure of 955k, both pointing to levels not seen since the summer of 2022.
  • Potentially seeing the impact/roll over from the shipping delays caused by the supply chain disruptions.

Domestic Production (s.ton)

  • For the week ending on April 27th, capacity utilization ticked down by 0.7% to 76.6% and domestic raw steel production fell to 701m from 1.716m/tpw. This is the lowest level of production since the end of January.
  • This brings the year-to-date production to 28.550m, operating at a rate of 3%, -2.9% below this point last year.