Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $32.35 per hundredweight ($647 per short ton) on Monday October 12, up by 1.1% from $32 per cwt on Friday October 9 and 2.5% higher than $31.55 per cwt a week earlier on October 5.
The current price is the index’s highest since it was calculated at this same level on May 1, 2019, more than 17 months ago.
Inputs from sources ranged from $30-33.50 per cwt, with most inputs clustered closer to $32.50 per cwt.
Heard in the market
Market participants continue to expect prices to push higher, supported by a combination of slowly rising demand and steps taken by mills to limit supply.
A shortage of slab also limited production capacity at some mills, due to the lower Section 232 quota on imports of Brazilian slab in the fourth quarter.
Lead times range from eight to nine weeks.
Sources again pointed to the automotive industry as one of the strongest sectors of the economy and one that shows no sign of letting up. Meanwhile, demand has continued to increase slowly across the board in other segments of the economy, and has been boosted by service centers rebuilding their inventories.
A few market observers reported worrying that demand might remain flat or even decline, and that prices could start to come down. New capacity is set to come online, which could end the price run-up in the first quarter of 2021, they noted.
Quote of the day
“There’s total confusion, and it’s not much fun anymore. We spend more time trying to negotiate somebody into even working with you [to make an offer]. The only reason they are not is they don’t have the capacity, and the bosses don’t know what to do with pricing,” a Midwest service center source said.
Index calculation
The assessor carried over data from Friday October 9 in the producer sub-index because of a lack of new inputs there.
Grace Asenov in New York contributed to this report.
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