WoW Executive Summary

ISSUE #356 – Week Over Week Report 11/04/2022

Despite negative sentiment, US manufacturers have continued to produce at relatively high levels in recent months. This is evidenced by strong manufacturing Purchasing Managers’ Index (PMI) data. While new orders have fallen and inventories have risen, the topline PMI number has remained high. However, new orders and backlogs are now approaching the lowest levels since Spring 2020, suggesting a manufacturing slowdown is imminent.

Upside Risks:

  • A sudden dovish shift in financial policy leading to less aggressive rate hikes
  • Strategic outages overshooting and causing production to fall below demand levels
  • Easing supply chain restraints and labor shortages causing an increase in activity
  • Energy issues abroad curtailing global production
  • China reopening its economy with further stimulus measures

 

Downside Risks:

  • Economic slowdown caused by increasing interest rates and sustained restrictive policy from the Federal Reserve
  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Sustained levels of import arrivals keeping pressure on domestic mill pricing
  • Limited desire to restock and persistently short lead times causing a “Buyer’s Strike”

 

The Platts TSI Daily Midwest HRC Index was down sharply this week, $85 ending at $655.

The CME Midwest HRC futures curve is below, with last Friday’s settlements in white. The curve moved sharply lower in the front month, but was down only slightly on the remainder of the curve.

 

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ISSUE #355 – Week Over Week Report 10/28/2022

China wrapped up their 20th Party Congress this past week. Many market participants hoped that this would be the time to see China begin to ease on their restrictive COVID-zero policy stance. However, the congress only served as an opportunity to double down on the current restrictive policy. The market shows its sensitivity to Chinese demand with iron ore falling levels not seen since early May 2020.

Upside Risks:

  • A sudden dovish shift in financial policy leading to less aggressive rate hikes
  • Strategic outages overshooting and causing production to fall below demand levels
  • China reopening its economy with further stimulus measures
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in activity

 

Downside Risks:

  • Economic slowdown caused by increasing interest rates and sustained restrictive policy from the Federal Reserve
  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Sustained levels of import arrivals keeping pressure on domestic mill pricing
  • Limited desire to restock and persistently short lead times causing a “Buyer’s Strike”

 

The Platts TSI Daily Midwest HRC Index was unchanged at $740.

The CME Midwest HRC futures curve is below, with last Friday’s settlements in white. The entire cure shifted sharply lower last week, most significantly in the front.

 

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ISSUE #354 – Week Over Week Report 10/21/2022

Despite an uptick in import arrivals last week, current imports still remain near the lowest levels since mid-2021. As a result, buyers have become far more reliant on domestic producers this year. Mills appear to be reducing their overall contract books to increase spot market activity. While we do not anticipate this having a drastic impact in the short term, there is increased risk of a short squeeze if buyers seek to restock simultaneously, in a more competitive spot market.

Upside Risks:

  • A sudden dovish shift in financial policy leading to less aggressive rate hikes
  • Strategic outages overshooting and causing production to fall below demand levels
  • China reopening its economy with further stimulus measures
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in activity

 

Downside Risks:

  • Economic slowdown caused by increasing interest rates and sustained restrictive policy from the Federal Reserve
  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Sustained levels of import arrivals keeping pressure on domestic mill pricing
  • Limited desire to restock and persistently short lead times causing a “Buyer’s Strike”

 

The Platts TSI Daily Midwest HRC Index was down $20 to $740.

The CME Midwest HRC futures curve is below, with last Friday’s settlements in white. The curve was slightly higher in the front and lower in the back, leading to an overall flattening at prices just below published spot levels.

 

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ISSUE #353 – Week Over Week Report 10/14/2022

The Midwest assessed price has stayed relatively flat around $800 for the past month. This has been supported by decreased imports, limited purchasing options for buyers. However, sheet imports have shown an uptick in the past week. Increased imports will put pressure on mills to reduce production or compete in the market with lower prices abroad. September imports fell to the lowest level since April 2021, but the latest uptick may lead to more domestic production cuts and furnace idling.

Upside Risks:

  • A sudden dovish shift in financial policy leading to less aggressive rate hikes
  • Strategic outages overshooting and causing production to fall below demand levels
  • China reopening its economy with further stimulus measures
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in activity

 

Downside Risks:

  • Economic slowdown caused by increasing interest rates and sustained restrictive policy from the Federal Reserve
  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Sustained levels of import arrivals keeping pressure on domestic mill pricing
  • Limited desire to restock and persistently short lead times causing a “Buyer’s Strike”

 

The Platts TSI Daily Midwest HRC Index was unchanged at $760.

The CME Midwest HRC futures curve is below, with last Friday’s settlements in white. The curve continues to be under significant pressure with the 4Q22 and 1Q23 both trading below current spot prices.

 

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ISSUE #352 – Week Over Week Report 10/7/2022

The latest manufacturing data suggests the U.S. economy remains strong, but growth continues to fade. The ISM Manufacturing PMI continues to climb while monthly construction spending fell in September for the third consecutive month. New orders and backlog’s have fallen, suggesting the headline manufacturing PMI number could follow suit in the coming months. As the market eyes the FOMC November meeting, every data point is being heavily studied by the market.

Upside Risks:

  • A sudden dovish shift in financial policy leading to less aggressive rate hikes
  • Strategic outages overshooting and causing production to fall below demand levels
  • China reopening its economy with further stimulus measures
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in activity

 

Downside Risks:

  • Economic slowdown caused by increasing interest rates and sustained restrictive policy from the Federal Reserve
  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Sustained levels of import arrivals keeping pressure on domestic mill pricing
  • Limited desire to restock and persistently short lead times causing a “Buyer’s Strike”

 

The Platts TSI Daily Midwest HRC Index was down another $20 to $760.

The CME Midwest HRC futures curve is below, with last Friday’s settlements in white. The curve continues to trend lower, with all the expirations currently trading at their lowest levels on record.

 

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ISSUE #351 – Week Over Week Report 9/30/2022

Demand for steel continues to fall on the back of worsening sentiment and outlook for the global economy. While inflation persists, rising interest rates have contributed to slowing global demand. Domestically, this has resulted in both decreased imports and production. Despite constrained supply, decreased demand has caused the HRC spot price to fall 48% from its peak in April 2022.

Upside Risks:

  • A sudden dovish shift in financial policy leading to less aggressive rate hikes
  • Strategic outages overshooting and causing production to fall below demand levels
  • China reopening its economy with further stimulus measures
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in activity

 

Downside Risks:

  • Economic slowdown caused by increasing interest rates and sustained restrictive policy from the Federal Reserve
  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Sustained levels of import arrivals keeping pressure on domestic mill pricing
  • Limited desire to restock and persistently short lead times causing a “Buyer’s Strike”

 

The Platts TSI Daily Midwest HRC Index was down another $10 to $780.

The CME Midwest HRC futures curve is below, with last Friday’s settlements in white. The entire curve continued its trend over the last three weeks and shifted lower. The 1Q23 is now trading at its lowest level since the contract began trading.

 

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ISSUE #350 – Week Over Week Report 9/23/2022

The FOMC announced another 75 basis point hike, signifying the Feds commitment to fighting inflation and stabilizing prices moving forward, whatever the costs may be. Hawkish policy will likely have a negative impact on short term steel prices, but the production flexibility of US EAF producers will be a significant resource in matching production with demand.

Upside Risks:

  • A sudden dovish shift in financial policy leading to less aggressive rate hikes
  • Strategic outages overshooting and causing production to fall below demand levels
  • China reopening its economy with further stimulus measures
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in activity

 

Downside Risks:

  • Economic slowdown caused by increasing interest rates and sustained restrictive policy from the Federal Reserve
  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Sustained levels of import arrivals keeping pressure on domestic mill pricing
  • Limited desire to restock and persistently short lead times causing a “Buyer’s Strike”

 

The Platts TSI Daily Midwest HRC Index was down another $10 to $790.

The CME Midwest HRC futures curve is below, with last Friday’s settlements in white. The entire curve continued its trend over the last three weeks and shifted lower. The 1Q23 is now trading at its lowest level since the contract began trading.

 

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ISSUE #349 – Week Over Week Report 9/16/2022

The spread between galvanized and hot-rolled steel has fallen for two consecutive months on relative weakness of galvanized products compared to hot-rolled. The momentum of the decline for HRC spot prices has temporarily stabilized, while HDG downward price momentum remains significant.

Upside Risks:

  • Reluctance in placing import orders, leading to a dramatic reduction in arrivals
  • Unplanned & extended planned outages causing production to fall below demand levels and cause a physical “short squeeze.”
  • China reopening its economy with further stimulus measures
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in activity

 

Downside Risks:

  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Steel consumers substitute to lower-cost alternatives
  • Limited desire to restock and persistently short lead times causing a “Buyer’s Strike”
  • Economic slowdown caused by increasing interest rates and sustained restrictive policy from the Federal Reserve

 

The Platts TSI Daily Midwest HRC Index was down $20 to $800.

The CME Midwest HRC futures curve is below, with last Friday’s settlements in white. The entire curve shifted lower last week, with Nov.22-May.23 futures settling at its lowest levels in the last month.

 

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ISSUE #348 – Week Over Week Report 9/9/2022

The July durable goods report showed a significant shock to the supply and demand battle with more shipments than new orders for the first time since November 2021. While new orders have risen from this time last year, the trend has slowed compared to recent months.

Upside Risks:

  • China reopening its economy with further stimulus measures
  • Unplanned & extended planned outages, including operational issues leaving mills behind
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in manufacturing activity
  • Reluctance in placing import orders, leading to a dramatic reduction in arrivals later this year

Downside Risks:

  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Steel consumers substitute to lower-cost alternatives
  • Limited desire to restock at elevated prices and persistently short lead times causing a “Buyer’s Strike”
  • Economic slowdown caused by increasing interest rates

 

  • The Platts TSI Daily Midwest HRC Index was up $20 to $820.

  • The CME Midwest HRC futures curve is below, with last Friday’s settlements in white. The majority of curve shifted higher, most significantly in the front, which led to an overall flattening of the curve.

 

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ISSUE #347 – Week Over Week Report 9/2/2022

August inflation, labor market, and manufacturing data suggest further hawkish monetary policy will follow from the FED at the September meeting. Construction spending has grown YoY, but the data presents a negative outlook for the future in an increasing interest rate environment.

  • The Platts TSI Daily Midwest HRC Index was up $40 to $800.

  • The CME Midwest HRC futures curve is below, with last Friday’s settlements in white. The entire curve shifted $35-40 lower last week on the back of a worsening macro backdrop, declining input costs, and a stronger dollar.

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ISSUE #346 – Week Over Week Report 8/26/2022

Jerome Powell removed any doubt over the FED’s commitment to fighting persistent inflation in Jackson Hole, WY. The market expects further hawkish monetary policy until inflation returns to the FED’s target of 2%. Higher interest rates increase borrowing costs and lead to decreased capital investment. Existing suppliers will likely be faced with variable demand and price volatility for unhedged steel.

Upside Risks:

  • China reopening its economy with further stimulus measures
  • Unplanned & extended planned outages, including operational issues leaving mills behind
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in manufacturing activity
  • Reluctance in placing import orders, leading to a dramatic reduction in arrivals later this year

Downside Risks:

  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Steel consumers substitute to lower-cost alternatives
  • Limited desire to restock at elevated prices and persistently short lead times causing a “Buyer’s Strike”
  • Economic slowdown caused by increasing interest rates

 

  • The Platts TSI Daily Midwest HRC Index was down another $30 to $760.
  • Global prices were mostly lower everywhere, except for China. The Chinese spot and export prices were each up 1%

  • The CME Midwest HRC futures curve is above last Friday’s settlements in orange. The back of the curve moved lower last week, while the front was essentially unchanged.

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ISSUE #345 – Week Over Week Report 8/19/2022

Input prices of busheling, pig iron, and shredded scrap have all fallen to levels not seen since early 2021, continuing a rapid fall since peaking near the end of Q1 2022. At the same time, domestic mills have seen their profitability fall below pre-invasion levels and have subsequently decreased production to help support prices near an $800 level.

Upside Risks:

  • China reopening its economy with further stimulus measures
  • Unplanned & extended planned outages, including operational issues leaving mills behind
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in manufacturing activity
  • Reluctance in placing import orders, leading to a dramatic reduction in arrivals later this year

Downside Risks:

  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Steel consumers substitute to lower-cost alternatives
  • Limited desire to restock at elevated prices and persistently short lead times causing a “Buyer’s Strike”
  • Economic slowdown caused by increasing interest rates
  • After pausing last week, the Platts TSI Daily Midwest HRC Index continued its recent trend and was down $20 to $790.

  • The CME Midwest HRC futures curve is above last Friday’s settlements in orange. The curve printed lower last week, with the front down the most significantly.

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ISSUE #344 – Week Over Week Report 8/12/2022

Our research shows that mills accounted for an increasing percentage of overall purchases relative to imports, a continuation of an eight-month trend. Domestic inventories fell while shipments rose as OEMs further destocking efforts coincide with an increasingly negative global economic outlook and the threat of increased interest rates.

 

Upside Risks:

  • China reopening its economy with further stimulus measures
  • Unplanned & extended planned outages, including operational issues leaving mills behind
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in manufacturing activity
  • Reluctance in placing import orders, leading to a dramatic reduction in arrivals later this year

Downside Risks:

  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Steel consumers substitute to lower-cost alternatives
  • Limited desire to restock at elevated prices and persistently short lead times causing a “Buyer’s Strike”
  • Economic slowdown caused by increasing interest rates

 

  • The Midwest HRC Index was unchanged at $810. This is the first time in 16 weeks that steel prices held steady and did not fall.

  • The CME Midwest HRC futures curve is above last Friday’s settlements in orange. The curve printed lower last week, with the front down the most significantly.

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ISSUE #343 – Week Over Week Report 8/5/2022

This month’s jobs report posted better than expected results as both the construction and manufacturing sectors posted strong numbers. The ISM Manufacturing PMI subindexes suggest demand is slowing while decreased strain on supply chains has opened the window for growth.

  • Midwest HRC Index fell another $30 to $810.
  • Northern European fell 5.7%, while Chinese spot HRC was up 1.4%

  • The CME Midwest HRC futures curve is above last Friday’s settlements in orange. The entire curve shifted lower last week, most significantly in the front with current levels pushing below the early-July trading range, causing to more significant contango.

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ISSUE #342 – Week Over Week Report 7/29/22

When global steel prices plus freight and applicable tariffs are at parity with domestic prices, it sets a floor for the U.S. domestic price by signaling that imports have been priced out of the market in the short-term. This spread has been converging rapidly since the beginning of May, with the U.S. price outpacing most global prices lower. Over the last two weeks, the first global differentials turned negative (Europe & Turkey), and today the remaining countries have approximately $70 remaining in their differential spread.

Upside Risks:

  • China reopening its economy with further stimulus measures
  • Unplanned & extended planned outages, including operational issues leaving mills behind
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in manufacturing activity
  • Reluctance in placing import orders, leading to a dramatic reduction in arrivals later this year

Downside Risks:

  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Steel consumers substitute to lower-cost alternatives
  • Limited desire to restock at elevated prices and persistently short lead times causing a “Buyer’s Strike”
  • Economic slowdown caused by increasing interest rates

 

  • The Midwest HRC Index was down another $10 to $840.
  • Global flat rolled indexes were mixed on the week. Chinese export HRC, was up 1.2%, while Antwerp HRC was down 3.5%.

The CME Midwest HRC futures curve is above last Friday’s settlements in orange. The entire curve shifted higher last week with each price (ex. August) at it’s highest level in the last 5 weeks.

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ISSUE #341 – Week Over Week Report 7/22/22

One of the major headwinds for the global steel market has been the sustained lockdowns and property slump in China. In response, the global production has started to throttle down and falling prices outside of China have started to lose their downward momentum.

Upside Risks:

  • China reopening its economy with further stimulus measures
  • Unplanned & extended planned outages, including operational issues leaving mills behind
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in manufacturing activity
  • Reluctance in placing import orders, leading to a dramatic reduction in arrivals later this year

Downside Risks:

  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Steel consumers substitute to lower-cost alternatives
  • Limited desire to restock at elevated prices and persistently short lead times causing a “Buyer’s Strike”
  • Economic slowdown caused by increasing interest rates

 

  • The Midwest HRC Index was down another $50 to $850.
  • Global flat rolled indexes were mostly lower again as well, led by Chinese spot HRC, down 8.8%.

The CME Midwest HRC futures curve is above last Friday’s settlements in orange. Both the front and back end of the curve rose last week with middle months Nov-22 and Dec-22 remaining unchanged.

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ISSUE #340 – Week Over Week Report 7/15/22

Import data shows a steady reduction in arrivals and that buyers are relying on the domestic mills more than they have at any point over the last year. If the ongoing trend of declining imports continues, domestic mills may find themselves in a strong negotiating position as OEMs destock. This would leave the US HRC price vulnerable to a significant rebound.

Upside Risks:

  • China reopening its economy with further stimulus measures
  • Unplanned & extended planned outages, including operational issues leaving mills behind
  • Energy issues abroad curtailing global production
  • Easing supply chain restraints and labor shortages causing an increase in manufacturing activity
  • Reluctance in placing import orders, leading to a dramatic reduction in arrivals later this year

Downside Risks:

  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Steel consumers substitute to lower-cost alternatives
  • Limited desire to restock at elevated prices and persistently short lead times causing a “Buyer’s Strike”
  • Economic slowdown caused by increasing interest rates

 

  • The Midwest HRC Index was down $40 to $900.
  • Global flat rolled indexes were mostly lower, led by Chinese export HRC, down 7.4%.

 

The CME Midwest HRC futures curve is below with last Friday’s settlements in white. The back of the curve was under the most pressure last week, which caused a reduction in contango.

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ISSUE #339 – Week Over Week Report 7/8/22

Since late March, Turkish scrap steadily sold off as fear around a raw material shortage subsided, until rebounding above the $350 level mid-June. Up to this point, the rally in Turkish Scrap has been an anomaly among the ferrous markets, and sustainability of the rally is highly uncertain, however it is an important reminder that each market will be impacted by both macro and domestic forces and that prices will not go down forever.

Upside Risks:

  • China reopening its economy with further stimulus measures
  • Unplanned & extended planned outages, including operational issues leaving mills behind
  • Seasonal pick-up in demand leading to regional shortages
  • Easing supply chain restraints and labor shortages causing an increase in manufacturing activity
  • Reluctance in placing import orders, leading to a dramatic reduction in arrivals later this year

Downside Risks:

  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Increased domestic production capacity leading to an increase in competitive pricing
  • Steel consumers substitute to lower-cost alternatives
  • Limited desire to restock at elevated prices and persistently short lead times causing a “Buyer’s Strike”
  • Economic slowdown caused by increasing interest rates

 

  • The Midwest HRC Index was down another $50 to $940.
  • Global flat rolled indexes were mostly lower, led by Black Sea HRC, down another 5.7%, while Antwerp HRC was slightly higher up 1.1%.

The Midwest HRC futures curve is below with last Friday’s settlements in red. The front of the curve was under the most pressure and the result was steeper contango, which suggests the market is currently oversupplied.

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ISSUE #338 – Week Over Week Report 7/1/22

On Friday, July 1st, there was a large release of economic data from the U.S. and Global Manufacturing PMIs as well as construction spending. The data was mostly below expectations and is representative of the recent slowing in the broader economy. With that in mind, the HRC spot price clearly has room to move lower, however, the forward curve is approaching FGM’s estimated cost floor for both imports and domestic producers.

Upside Risks:

  • China reopening its economy with further stimulus measures
  • Unplanned & extended planned outages, including operational issues leaving mills behind
  • Seasonal pick-up in demand leading to regional shortages
  • Easing supply chain restraints and labor shortages causing an increase in manufacturing activity
  • Reluctance in placing import orders, leading to a dramatic reduction in arrivals later this year

Downside Risks:

  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Elevated price differentials and hedging opportunities leading to sustained higher imports
  • Steel consumers substitute to lower-cost alternatives
  • Limited desire to restock at elevated prices and persistently short lead times causing a “Buyer’s Strike”
  • Economic slowdown caused by increasing interest rates

 

  • The Midwest HRC Index was down another $60 to $990.
  • Global flat rolled indexes were mixed. Black Sea HRC was down another 10.2%, while Chinese spot HRC was up 1.4%.

The Midwest HRC futures curve is shown below with last Friday’s settlements in white. The front of the curve was slightly lower while expirations Sep-22 and beyond all increased. This represents the first time that the curve traded in contango since it happened briefly in February, just before the Russian invasion into Ukraine occurred.

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ISSUE #337 – Week Over Week Report 6/24/22

The current downside move in US HRC, which started in the September 2021 and was briefly interrupted by fears around a raw material shortage, has resulted in an average weekly decrease of 3.4%. The forward curve today is pricing in 5 more weeks of declining spot prices before flattening. However, the current forward curve is trading above FGM’s estimated cost support level – it would take an additional 10 weeks at the current pace for spot prices to breach the current cost support estimate.

Upside Risks:

  • China reopening its economy with further stimulus measures
  • Unplanned & extended planned outages, including operational issues leaving mills behind
  • Seasonal pick-up in demand leading to regional shortages
  • Easing supply chain restraints and labor shortages causing an increase in manufacturing activity
  • Reluctance in placing import orders, leading to a dramatic reduction in arrivals later this year

Downside Risks:

  • Decreasing input costs allowing mills to aggressively sell lower while remaining profitable
  • Elevated price differentials and hedging opportunities leading to sustained higher imports
  • Steel consumers substitute to lower-cost alternatives
  • Limited desire to restock at elevated prices and persistently short lead times causing a “Buyer’s Strike”
  • Economic slowdown caused by increasing interest rates

 

  • The Midwest HRC Index was down another $20 to $1050.
  • Global flat rolled indexes were lower, led by Antwerp HRC, down 11.2%.

The Midwest HRC futures curve is below with last Friday’s settlements in white. The entire curve shifted lower except for the front month, Jun-22 contract. The largest shift down can be observed in the midsection of the curve with a $70 decrease in Aug-22.

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