Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $36.35 per hundredweight ($727 per short ton) on Monday November 16, up by 1.1% from $35.96 per cwt on Friday November 13 and up by 3.3% from $35.19 per cwt one week ago on November 9. The current price is the index’s highest since it was calculated at $36.40 per cwt on December 27, 2018.

Inputs were received in a range from $33-39 per cwt, while mill lead times have stretched out to January-February 2021.

Heard in the market
Sources noted an absence of near-term headwinds for the domestic HRC market, with most mills now quoting for February and demand from critical steel-consuming end markets - aside from the beleaguered oil and gas sector - remaining resilient.

That said, drill rig activity within the United States has continued to improve from all-time lows reached earlier this year. The number of drill rigs running in the US totaled 312 in the week ended November 13, the highest since reaching 318 rigs during the week ended May 22, although the current total is down by 61.3% from 806 rigs at this time last year.

Beyond ongoing supply-side concerns and strong end-market demand, domestic spot hot ban prices have been supported by upbeat buyer sentiment, increasing ferrous scrap and iron ore costs and limited competition from imports.

Buyers generally agreed that it is a sellers’ market, in terms of spot pricing, and did not expect to see a correction unless there is another round of widespread Covid-19 pandemic-related shutdowns. 

Quotes of the day
“There’s a lot of interesting things out there on the supply side, and that’s without any energy demand,” one consumer said. “[Mills] are definitely in the driver’s seat.”

“It is a toss-up when we will start to see relief, but I have heard between February [and] March,” a southern service center source said. “I personally believe the shortage in supply and higher pricing has legs to go all the way through Q1.”

Michael Cowden in Chicago contributed to this report.