Fastmarkets’ daily hot-rolled coil index, fob mill US was calculated at $34.43 per cwt ($688.60 per ton) on Friday, down 1.1% from $34.82 per cwt on Thursday November 5 but up 0.6% from $34.21 per cwt on Monday November 2.
Fresh inputs were received in a broad range from $33.50–37 per cwt across all three sub-indices.
Heard in the market
A very limited supply of spot material remains for December with most mill lead times now stretching into January of next year. While confirmed deals lowered the daily index, most sources agreed that it would only be a matter of time before $35 per cwt pricing levels become the common denominator across the spot market.
Sources said this would be a function of several factors, chief among them very tight availability, with mills prioritizing automotive contracts above supplying service centers and pipe and tube producers.
While demand from the automotive industry has strengthened the flat-rolled steel market, the amount of capacity taken offline during the height of the Covid-19 pandemic continues to shore up current price levels, sources said.
Furthermore, modest upside pressure will be felt in the near term on the back of rising raw material costs, with the price of Chicago No. 1 busheling increasing by $10 per ton in November’s ferrous scrap trade, and imported material remaining irrelevant for the time being.
Quotes of the day
“It’s a very tight steel market right now... [Service center] inventories are very low, they’re having a hard time buying what they need,” a mill source said. “This is more of a market that’s going to be driven by availability.”
“Only concern is scrap isn’t moving up proportionally to [hot-rolled] pricing,” said a Great Lakes service center source. “This gives the mini [mills] a big advantage, and doesn’t keep them disciplined in terms of maintaining a price logic based on higher [input] costs.”
