The Raw Steels Monthly Metals Index (MMI) showed a modest 0.12% increase from September to October. Despite this slight rise, the steel market remains volatile, as U.S. flat rolled steel prices continue to show mixed performance. Hot rolled coil (HRC) prices saw an upward trend, while cold rolled coil (CRC) prices moved sideways, and hot-dipped galvanized (HDG) prices dipped before finding a bottom in mid-September.
U.S. Flat Rolled Steel Prices Reflect Mixed Trends
Throughout September, the U.S. flat rolled steel market experienced varying price movements. HRC prices continued their recovery, following a bottom in late July and increasing 7.3% to $703 per short ton (st) by early October. Meanwhile, CRC and HDG prices began to follow suit after bottoming out in mid-September. By October 5, CRC prices rose 2.6%, climbing from $965/st to $990/st. Despite these gains, overall momentum for flat rolled steel remains constrained by softening demand conditions and higher distributor inventory levels.
Steel Output Plummets Amid Ongoing Mill Maintenance
One of the key factors contributing to the steel market’s current volatility is the ongoing mill maintenance outages, which began in August and are scheduled to conclude by the end of November. During the early stages of the outages, U.S. steel output remained relatively strong. However, by mid-September, production began to drop significantly. According to data from the American Iron and Steel Institute (AISI), as of October 4, raw steel output had fallen to its lowest level since January 2023, down 9.88% from its late August peak.
While mills initially attempted to raise prices ahead of the outages, the success of these efforts has been limited. HRC prices, in particular, have managed to rise, but demand softness and longer lead times have kept broader price momentum muted.
HRC Prices Hold Steady, But Demand Softens
In recent months, both Nucor and Cleveland Cliffs made concerted efforts to support higher HRC prices. By the end of Q3, Nucor’s consumer spot price remained at a premium to MetalMiner’s HRC index, with prices holding at $27/st above the index price as of October 7. However, with demand conditions weakening, the market has largely resisted the premium being asked by mills.
While HRC prices have remained resilient, the broader market is not expected to sustain an aggressive upward trend, especially with the anticipated return of capacity as mills come back online later in Q4.
Global Steel Prices See Mixed Results with Supply Chain Challenges
Internationally, steel prices have faced mixed outcomes, particularly in China, where steel slab prices rose 10.4% to $552 per metric ton as of October 1. Meanwhile, Chinese coking coal prices also increased by 9.61%, reaching $213 per metric ton. Despite these gains, other segments of the global market have seen declines. Chinese HRC prices dropped by 2.32% to $421 per short ton, signaling potential challenges in maintaining price momentum amid fluctuating demand and supply chain disruptions.
Meanwhile, U.S. shredded steel scrap prices declined by 1.85%, moving sideways at $372 per short ton, while LME steel strap prices rose 7.3% to $397 per metric ton.
What’s Next for Steel Prices After Outages?
As mills conclude their maintenance outages and come back online, the market will need to absorb the remaining supply disruptions, which account for roughly 56% of the 1 million short tons of flat rolled steel affected by the outages in October and November. While the outages have helped clear some of the excess inventory, the market’s muted response thus far suggests that mills may struggle to maintain upward price momentum by the close of Q4.
Given the continued contraction in U.S. manufacturing activity, as evidenced by the ISM Manufacturing PMI falling to 47.2 in September, demand is unlikely to rise sharply in the near term. Additionally, the rise in imports poses further challenges to domestic price increases, especially as global steel prices remain at a discount to U.S. prices.
