Fundamental Report

Supply-Side Takeaway:

The first look at May imports shows that arrivals remain elevated, while we exit this year’s domestic mill maintenance season. The current surplus suggests there will be further convergence between the U.S. domestic and global HRC spot prices.

The Domestic – Global HRC price differential contracted, mainly due to the domestic spot price decreasing more than the rising global average. For imports, the first of preliminary data for May arrivals indicate a continued trend higher from April’s preliminary estimate, pointing just above 1M st./m. Meanwhile, domestic production bounced off the low hit last week, potentially indicating a reversal of the recent downward trend.

HRC Spot Prices – US Domestic & Global

  • The global HRC spot price rose by $2 to $697. This week the increase was primarily due to Europe rising by $15, and China declining by $1. The global average has been gradual inching back towards $700 for the past several
  • The Domestic – Global HRC spread contracted after three consecutive weeks of expanding, narrowing by $17 to $123.

Total Sheet Imports (s.ton)

  • Imports estimated sheet arrivals for May indicate a continued trend higher for imports, climbing just over 1M tons from April’s preliminary figure of 971k, both pointing to levels not seen since June 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 May 4th, capacity utilization ticked up by 0.4% to 77.0% and domestic raw steel production climbed to 1.709m from 1.701m/tpw.
  • This brings the year-to-date production to 30.259m, operating at a rate of 3%, -2.9% below this point last year.