Scrap Rides the US Cold Wave and HRC Continues to Heat Up
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Ferrous Scrap buying for February, as expected largely because of frigid weather across much of the US, settled with higher pricing in all regions and for virtually all grades. Market participants told WSD that prime scrap was up $30 per gross ton, while some other grades like No. 1 heavy melt gained $20 in more southern regions. Meanwhile, US-made hot-rolled coil spot prices continued their steady climb, edging closer to the $1,000 per ton mark, on sustained demand and limited supply.
“We’re seeing HRC creep up $5, $10 every week now,” a steel trader said. “And it’s somewhat surprising they are not yet higher than $970 per ton given such minimal import competition.”
“For sure, $970 per ton seems locked in this week,” said a Midwest service center buyer. “There are not many offers or transactions taking place below that as mills are still prioritizing contract buying.” He added that some mills are saying lead times for spot are as long as 7-10 weeks.
Nucor raised its Consumer Spot Price (CSP) for HRC another $5 to $975 per ton on Monday.
Tuesday (February 10th) morning (11 AM CT) HRC futures quotes on the CME were all up between $1-$7 through the July contract. The most active month was March, up $7 to $978 from Monday’s settlement.
On Monday, February settled at $977, March at $971 and April at $970, before dipping to $957 for the May contract.
WSD Take:
US hot-rolled coil prices appear stable at approximately $970 per ton. In the coming days, WSD will continue to study current demand conditions, though at present we are quite pessimistic about the immediate-term demand outlook.
One key indicator is the lack of urgency in placing orders ahead of the spring season. Despite limited import orders amid substantial tariffs, there has not been a noticeable rush to secure material before what is typically the strongest period for steel demand, particularly in the second and third quarters. Order books have been consistent but lead times have remained steady at roughly 6-6.5 weeks for HRC since late November.
Looking forward, this dynamic could result in a $30 to $50 decline from current levels, implying a potential move from about $975 per ton down to a range of $920 to $945 in the coming weeks.
The next several months will be critical in assessing the broader strength of the US economy. Upcoming job reports, trends in consumer behavior, and recent retail data will be closely watched. December retail figures indicated consumers may be holding back amid job market and inflationary pressures.
Interest rate policy remains a key variable. With a change in Federal Reserve leadership expected in the coming months and the potential for a more aggressive approach to interest rates under President Trump’s appointee, policy direction could play a significant role. WSD anticipates that an adjustment in policy by May could support stronger demand in the second half of the year, potentially lifting prices back above $1,000 per ton by Q3.
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