Fastmarkets daily steel hot-rolled coil index, fob mill US was calculated at $34.82 per cwt ($696.40 per short ton) on Thursday November 5, up by 0.9% from $34.52 per cwt on Wednesday and by 1.9% from $34.16 per cwt on October 29.

US HRC prices now stand at their highest point since reaching $34.88 per cwt on March 18, 2019.

Heard in the market
Inputs were received in a narrow band of $33.50-35 per cwt and across all three sub-indices: Producer, distributor and consumer.

While some mills still have availability in December, others have closed their order books for 2020 - some without taking spot orders in December - and have yet to open them for January, market participants said.

And there are rumors that mills could open January order books with HRC prices up to $37-39 per cwt, sources said.

Higher prices would be supported by strong automotive demand - evidenced by strong earnings at General Motors Co, extremely limited spot supplies and lean inventories across the supply chain. Also providing support are lingering furnace problems at some integrated mills and longer than expected maintenance outages at electric-arc furnace (EAF) producers - issues that continue to squeeze supplies, some sources said.

But other sources said that prices could be nearing a plateau despite those factors. One potential catalyst for a slowing of the three-month bull market for steel is import competition, if mills raise prices too aggressively. And imports could become an even bigger issue if President Donald Trump wins a second term or Joe Biden wins and eases Section 232 trade barriers, sources said.

Also, increased domestic supplies - resulting from new capacity coming online, upgrades to existing facilities and idled capacity restarting - could also pressure prices, they said.

And while some said a shift in consumer spending toward steel-intensive goods - including cars and appliances - will continue to drive demand, others cautioned that activity could slip if a gridlocked US government fails to deliver another round of stimulus and if demand from the oil and gas sector remains weak.

Quote of the day
“We see a lot of people scrambling for steel,” one mill source said. “If they don’t take it [at the initially offered price], they come back a few days later and ask if it’s still available.”

Dom Yanchunas in New York contributed to this article.