Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $33.76 per hundredweight ($675.20 per short ton) on Friday October 23, up by 0.3% from $33.66 per cwt the previous day and by 1.8% from $33.17 per cwt on October 16.

Heard in the market
Inputs were received in a range of $32.25-35 per cwt, and across all three sub-indices for producers, distributors and consumers. No information was collected via data submitter agreement.

Inputs at the higher end of the range likely represent transactions by buyers that are somewhat desperate for material, with inventories currently at significant lows. Inputs at the lower end of the range could represent transactions for tons for delivery in November. Some mills still have tons available for late-November delivery, market participants said. Some mills also have yet to open December order books, keeping current supply tight.

Deals for December are expected to be transacted higher than current levels, at around $35 per cwt or a bit higher, based on initial offers and dependent on tonnage. Some buyers cautioned against producers running the price too high, with demand remaining spotty and mill capacity utilization rates still relatively low in the high-60% range, according to the American Iron and Steel Institute.

Yet inventories also remain low, which could keep prices elevated for the foreseeable future, market participants said.

The annual contract season is well under way and could wrap up in the next couple of weeks, sources said.

A few noted that this year some mills are seeking more annual contracts tied to the spread between busheling scrap and hot-rolled coil, which is currently relatively high.

Quote of the day
“Things have been moving at a ferocious pace,” an East Coast distributor source said. “This is like a winter storm where they predicted 6 in and you end up getting 18 in or two feet... I would hope that the mills don’t chase this thing too high. They’d only be hurting themselves in the long run if the number falls off the cliff.”

Dom Yanchunas in New York and Michael Cowden in Chicago contributed to this article.

Fastmarkets’ flagship global steel event, Steel Success Strategies, is running as an online conference on October 26-28, 2020. Register today to hear directly from Fastmarkets’ pricing experts and analysts, as well from some of the most important chief executive officers in global steel.