Fastmarkets' daily steel hot-rolled coil index, fob mill US was calculated at $48.89 per hundredweight ($977.80 per ton) on Wednesday December 16, up 5.3% from $46.44 per cwt on Tuesday December 15 and up 11.1% from $44 per cwt a week earlier.

Inputs were received in a range of $45-51 per cwt. The assessor discarded one input at $50 per cwt from the producer sub-index because the mill in question had yet to officially unveil that new, higher price. But a medium-sized spot transaction - defined as 500 to 1,999 tons - was recorded at the same price in the consumer sub-index.

Heard in the market
Higher prices stemmed from a tide of price increases. They were mostly unannounced and rolled out quietly by mills to individual customers, and several specified minimum base prices of at least $50 per cwt for HRC, market participants said.

Lead times range from approximately six to 12 weeks - or into March at some producers, participants said. Consumers in need of steel, therefore, have little choice but to pay the historically high prices, sources said.

US HRC prices are at their highest since $50 per cwt in early September 2008, more than 12 years ago and shortly before the outbreak of the financial crisis. Some sources said it’s risky to buy now because domestic prices could correct violently downward as they did in the fourth quarter of 2008.

But others said prices have more upside potential over at least the next month thanks to limited import competition, strong steel tags at home and abroad, especially in China, as well as to higher raw material costs both globally and domestically.

Quote of the day
“If buyers need February, I believe they can find limited tons. But the price is minimum $50 per cwt, and I have the impression that prices will be $54-55 per cwt within the next 30 days,” one distributor source said.