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Fundamental Report

Supply-Side Takeaway:

Imports are gradually declining, and reduced domestic production due to outages is becoming evident, with this week’s level reaching its lowest point in 11 weeks. The domestic – global price differential reached its highest level since May, as the U.S. price outpaces the rest of the world, higher.

This week’s data: The Domestic – Global HRC price differential expanded further as the domestic spot price jumped up while the global average price increased slightly. On the imports side, final census data for August arrivals came in a little heavy. At the same time, this week’s estimate for September arrivals indicated a slighter decline. Domestic production ticked down, dropping to its lowest level since early July, retreating below its long-term average as outage season kicks in.

HRC Spot Prices – US Domestic & Global
  • The global HRC spot price rose to $639 from $637. This week the price changes were from: +$6 in Turkey, +$5 in China. +43 in Korea, -$2 in Europe.
  • The Domestic – Global HRC spread expanded further, widening from $63.28 to $81.38.
Total Sheet Imports (s.ton)
  • This week’s imports estimated sheet arrivals for September indicate a continued decline, falling to 911k tons from August’s final census data figure of 918k.
  • It is highly unlikely that we would see another surge in arrivals for the remainder of the year. That said, we do anticipate some volatility in these figures as we push below the longer run “neutral level”.
  • The named countries from the filed trade petition represent nearly 80% of the expected total arrivals for coated products in 2024.
Domestic Production (s.ton)
  • For the week ending on September 21st, capacity utilization ticked down by 4.9% to 76.9% and domestic raw steel production fell to 1.707m from 1.749m/tpw.
  • This brings the year-to-date production to 64.566m, operating at a rate of 76.8%, -1.6% below this point last year.