Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $41.98 per hundredweight ($839.60 per short ton) on Thursday November 3, up by 3.7% from $40.50 per cwt on Wednesday and by 7.6% from $39 per cwt before the Thanksgiving holiday last week.

US HRC prices are now at their highest point in nearly 27 months ago, since reaching $42.27 per cwt on September 6, 2018.

Heard in the market
New inputs were received in a wide range of $39.50-48 per cwt, a spread of $8.50 per cwt. Wide spreads sometimes indicate an inflection point in prices, and market participants almost unanimously expect prices to inflect upward.

Deals for smaller quantities, hundreds of tons, were reported at the lower or middle end of the range received. Most sources contacted by Fastmarkets agreed that prevailing spot prices, to the extent spot tons are available, are at approximately $42-43 per cwt.

Lead times are into January, February or even March at some mills. Other mills have closed January and not yet opened February, sources said.

The lack of spot tons has contributed to a growing sense of panic in the Great Lakes region, where unplanned outages and stricter contract terms have left some customers scrambling for material with price a secondary concern to availability, they said.

It was not immediately clear whether inputs significantly above $42 per cwt - $45 per cwt or more in some cases - were from electric-arc furnace (EAF) mills seeking a premium for tons they had held back for prompt delivery in late December or January or whether those mills might be testing out new, higher base prices after scrap settled up by a higher-than-expected $70-per-gross ton in the Detroit area, sources said.

Whatever the case, US HRC prices appear set to test a post-Section 232 high of $45.84 recorded on July 5, 2018. Prices have not been significantly above that level since before the 2008 financial crisis, according to Fastmarkets pricing archives.

Quote of the day
"The big unknown is what the incoming administration will do with Section 232 tariffs,” one Midwest service center source said. ”It doesn’t look like any changes in the near future, so the mills are going to try to milk it all the way to $50 per cwt.”

Index calculation
An offer at the higher end of the range received on Thursday was automatically discarded by the index’s outlier filter. The assessor carried over an input in the producer sub-index because he did not receive new data there. He also carried over an input in the consumer sub-index due to significant day-to-day volatility within that index.