Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $32.72 per hundredweight ($654.40 per short ton) on Thursday October 15, up by 0.7% from $32.48 per cwt on Wednesday and by 3.6% from $31.58 per cwt on October 8.

This is the highest level since the index was calculated at $33.05 per cwt on April 25, 2019.

Heard in the market
Inputs ranged from $32-36 per cwt and across all three sub-indices: Producer, distributor and consumer. Transactional data received ranged from $32.50-34 per cwt. Larger orders were at $32.50 per cwt, and smaller transactions at $33-34 per cwt.

Lead times are into December or January at several mills, or out as far as 10-12 weeks, market participants said.

Some mills with spot availability in 2020 are charging a premium for the limited tons they do have available this year, these sources said.

And while some sources said they had transacted at $32.50 per cwt - the official list price for multiple mills - others said that price was increasingly gone from the market and reported paying $33 per cwt or more, even in the absence of price increase announcements.

The situation reminded some sources of the days following the rollout of US Section 232 tariffs and quotas in 2018, when mills raised prices dramatically in the absence of price increase announcements because the market needed no reminder of which direction pricing was headed.

HRC prices continue to be supported by limited spot availability, lean customer inventories and strong demand across the automotive, appliance and construction sectors, sources said.

And some predicted that prices were more likely to climb past $35 per cwt and perhaps as high as $40 per cwt before reversing.

Still, others said they fear that prices could fall in the first quarter due to increased supply once new capacity comes online and existing capacity restarts.

These sources indicated that it was not a question of whether prices would correct, but rather whether the correction would be gradual or sudden.

Quote of the day
“I hope it’s a soft landing and that we don’t fall off a cliff,” one East Coast service center source said.

Index calculation
One input at $36 per cwt was discarded by the assessor because it could not be verified with a sufficient degree of confidence. One input was received via a data submitter agreement.

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