Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $42.53 per cwt on Friday December 4, up by 1.31% from $41.98 per cwt on December 3 and up by 9.05% from $39 per cwt before the Thanksgiving holiday.

US hot band prices now stand at their highest since $42.68 per cwt on August 30, 2018 – more than 27 months ago – when prices spiked amid the Section 232 market frenzy.

Heard in the market
Inputs were received from $42-45 per cwt. The lower end of that range was representative of offers from some mills as well as a deal for more than 1,000 tons. The higher end of the range was reflective of new, higher offers from certain mills following a big jump in domestic ferrous scrap prices – which appear to be up at least $70 per gross ton this month, with additional gains expected in January 2021.

Lead times varied widely depending on individual companies and their commercial strategies. For example, one mill has yet to officially open order books for 2021; another mill has already moved into February, either without having opened for January or having done so only briefly; and still others are effectively into March, sources said.

Rising prices are supported not only by increasing raw material costs and long lead times but also by higher prices abroad as well as by outages – planned and otherwise – across the North American supply chain. Further support comes from service centers and tube mills that have restocked at current prices and therefore have a vested interest in seeing prices move higher still, sources said.

The result: Sources said it is probably only a matter of time before prices hit $45 per cwt, and several said $50 per cwt is a possibility within the next month.

US HRC prices have not been at $50 per cwt since September 4, 2008, according to Fastmarkets’ records. That’s more than 12 years ago and shortly before the September 15, 2008, collapse of investment bank Lehman Brothers triggered a financial crisis.

Quote of the day
“It’s no longer trying to get an extra buck or two at a time. They are going to be asking for a heck of a lot of money,” one Gulf Coast steel consumer said. “When spot availability is this tight, the few pounds that they have to sell, they are going to get a really beefy premium for it.”

Elizabeth Ramanand in New York contributed to this report.