US hot-rolled coil index climbs further

Hot-rolled coil prices in the United States have risen to their highest in almost exactly two years after more buyers perceived that a true steel shortage is intensifying for the end of 2020 and the beginning of the first quarter of 2021.

Fastmarkets’ daily hot-rolled coil index, fob mill US was calculated at $39.08 per hundredweight ($781.60 per short ton) on Tuesday November 24, up 0.7% from $38.80 per cwt on Monday November 23, and a jump of 7.7% from $36.31 per cwt one week earlier. 

The index is at its highest point since rising to $39.33 per cwt on November 21, 2018 – when the US market was in the throes of a supply scramble due to the advent of President Donald Trump’s Section 232 order. 

Inputs were received in a broad range of $37-42 per cwt. The higher end of the range represents mill’s newest offers, while the lower end of the range represents sources’ assessments based on the most recent spot transactions.

Heard in the market
Lead times for spot tons are thought to be deep into January or February.

Market participants reported that mini-mills have sharply increased their offers as a result of a dearth of spot availability in the January shipment window. Mini-mills are further emboldened because at least one of their integrated-mill competitors has slowed production in reaction to Covid-19 outbreaks among its steelworkers, source said.

Some distributors simply cannot find a supplier to sell them coil on a spot basis, and that lack of tonnage has disrupted the ability of steel-consuming manufacturers to procure material, threatening to halt their enterprises. Any newly-identified import sources will not arrive in time to alleviate the shortage, sources said.

Quote of the day
“If there is no availability, the mills can charge whatever they want. The sky is the limit,” a midwestern distributor said. “The distributors are effectively starting to shut down some customers. Any consumer who has not secured a source of steel will not find anyone to sell steel to them. That’s already happening. Everyone will be effectively slamming on the brakes here… The effects of the 232 are still in place, and the import is limited, so this is worse than 2018.”

Index calculation
Data reflecting the offers at the highest end of the range were discarded due to a lack of confirmation of any immediate transactions at those levels. The assessor carried over non-transactional inputs within the producer sub-index due to a lack of liquidity. The assessor carried over one non-transactional input in the consumer sub-index due to fresher data at a level not yet judged to be accepted by buyers.

What to read next
Fastmarkets is inviting feedback from the industry on the pricing methodologies for its steel hot-rolled coil index domestic, exw Northern Europe, €/tonne (MB-STE-0028) and steel hot-rolled coil index, fob mill US Midwest, $/cwt (MB-STE-0184) as part of its annual methodology review process.
The publication of Fastmarkets’ US and Brazil pig iron price assessments for Friday Feb 23 were delayed because of an administrative error.
Fastmarkets has amended the formula for its MB-AL-0231 — aluminum P1020A all-in price, delivered Midwest US, US cents/lb to include the London Metal Exchange official cash AM bid aluminium price effective immediately.
What’s the market sentiment for December? Read on for a summary of the results of our US ferrous scrap market survey for December, or click here to download your copy of the full US Scrap Trends Outlook for December 2023. The US ferrous scrap market is hotting up in winter months Significantly depressed scrap flows […]
Talks between the European Union and the United States began in October 2021, where both parties announced the Global Arrangement on Sustainable Steel and Aluminium (GASSA), a partnership in which both parties would negotiate an arrangement to combat global overcapacity and climate change. The discussions would include discouraging trade in high-carbon steel and aluminum that […]
US steel scrap prices ahead of November trade The Trend Indicator has rebounded into bullish territory, at 61.4 for November compared with a resolutely bearish 45.6 in October. This month’s indicator is at its highest since March’s outlook, when it was 65.2. The Outlook’s prediction model allows for an average month-on-month price increase of 5.1%. Respondents […]