Product

HRC vs. busheling spread down a tick in December
Written by Ethan Bernard & Stephen Miller
December 13, 2024
The price spread between hot-rolled coil (HRC) and prime scrap narrowed slightly in December, according to SMU’s most recent pricing data.
SMU’s average HRC price slipped week over week (w/w), and the December price for busheling fell from November.
Our average HRC price as of Dec. 10 was $675 per short ton (st) FOB mill, east of the Rockies, down $5 per short on (st) w/w.
At the same time, busheling tags fell in December. They are down $12.50 per gross ton (gt) month over month to an average of $392.50/gt. Figure 1 shows price histories for each product.

After converting scrap prices to dollars per short ton for an equal comparison, the differential between HRC and busheling scrap prices was $325/st as of Nov. 14. That’s down a mere $3/st from a month earlier (Figure 2). The spread hasn’t topped the $400/st mark since it was at $409/st in May.
What’s going on?
Unless HRC prices rise in January, the spread between #1 Busheling and HRC will continue to narrow. In fact, it already has begun.
When the scrap market initially started to form earlier this month, mills posted bids $20/gt lower than November. But, some major buyers subsequently had to adjust their prices upward to cover their requirements.
We will see this effect when the January spread is calculated since price tags for busheling are likely to increase.
HRC premium as a percentage
The chart on the right-hand side below shows the spread relationship differently: We have graphed HRC’s premium over busheling scrap as a percentage. HRC prices carry a 72% premium over prime scrap. That’s up from 70% a month earlier.

 
			    			
			    		Ethan Bernard
Read more from Ethan Bernard 
			    			
			    		Stephen Miller
Read more from Stephen MillerLatest in Product
 
		                                SMU Survey: Mills less negotiable on spot prices
Most steel buyers responding to our market survey this week reported that domestic mills are considerably less willing to talk price on sheet and plate products than they were in recent weeks.
 
		                                SMU Survey: Lead times tick higher
Steel mill lead times marginally extended for both sheet and plate products this week, according to responses from SMU’s latest market survey.
 
		                                Buyers say plate market rejected last round of mill hikes
Participants in the domestic steel plate market said the plate market never accepted mill-issued spot price increases.
 
		                                Possible sideways move for ferrous scrap prices in November?
The domestic scrap market will start to form as early as next week for November shipment, sources told SMU. Predictions as of now are neither very positive for an increase nor are they negative for a decrease.
 
		                                SMU price ranges: Sheet ticks higher, plate stable
Sheet steel indices increased across the board this week, while plate prices held steady. All five of SMU’s price indices are higher than they were two weeks ago, and all but one are above levels recorded four weeks ago.
