Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $58 per hundredweight ($1,160 per short ton) on Thursday January 14, up by 6.7% from $54.38 per cwt on Wednesday January 13 and an increase of 7.1% from $54.17 per cwt one week earlier on January 7.

Inputs were received in a range of $52.00-67.50 per cwt across all three sub-indices - representing confirmed deals, fresh mill offers and broader assessments of spot market pricing levels. Non-transactional inputs at the low and high ends of that range were automatically discarded by the index’s outlier filter. Non-transactional inputs were carried over within the producer and distributor sub-indices at the assessor’s discretion to minimize day-to-day volatility.

Heard in the market
The current index has blown past the previous high-water mark of $56.25 per cwt logged in May 2008. The price now stands at its highest level ever recorded since Fastmarkets started covering this segment of the domestic steel market in 1960.

Hot-rolled lead times have extended out to late March and into April, according to market participants. Key dynamics contributing to HRC's bull run remain: soaring raw material costs, an unprecedented supply squeeze, low service center inventories, decent demand and a lack of imports. But with HRC prices at a historic high, some market participants questioned when momentum may shift.

Some sources speculated that hot-band prices may hit a ceiling in the next month or two. They noted that supply may increase then, as a result of rerollers producing coil from quota-released slab imports, Big River Steel’s Phase 2 expansion coming online, and the arrival of competitively priced flat-rolled steel from overseas producers.

Quotes of the day
“Imports are now more attractive even with the longer lead times, and in some cases the lead time is not much longer than domestic,” a Midwest service center source said.

“Service center inventories are not good at all, honestly. Everyone in the South is calling each other trying to spot buy coils - every day,” a consumer source said. “I’m feeling we may not reach the top till April, May now. Demand is so strong. [We] need more supply, and relief isn’t coming anytime soon.”