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US HRC spot activity remains slow during contract negotiations

Friday, 01 October 2021

US hot-rolled coil prices were mostly unchanged on Oct. 1 and participants continued noting weak spot market participation as contract negotiations for 2022 were slowly progressing.

The daily Platts TSI US HRC index was assessed $3.50 higher at $1,960/st on an ex-works Indiana basis.

“We are hot and heavy in the contract negotiations stages,” a mini-mill source said. “Our lead times are out until December; so we have not quoted much of anything.”

The mill source started seeing some customers place orders closer to their minimum allocations in contracts with higher inventory levels but had little concern with a strong order book for Q4.

“We are watching our inventory levels closely,” a service center source said. “We are already above pre-pandemic levels and will try to draw down those stocks in Q4.”

Despite weaker spot market participation, he has not seen mills become flexible in pricing to take orders. He, meanwhile, cited an offer at $1,500-$1,520/st from Turkey with a January or February arrival time.

Another service center source noted little progress in contract renewal negotiations as his suppliers offered minimal discounts with full extras and freight rates. In case of no drastic changes in offers, he was considering in having a larger spot exposure in 2022.

Domestic mills were at $1,960-$2,000/st for their spot availability and volumes were limited, according to the second service center source. Despite elevated prices, he still saw steady demand from his customers.

-- Ali Oktay

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