Deals lower US hot-rolled coil index; $35/cwt still seen as imminent

Though confirmed deals lowered hot-rolled coil prices in the United States on Friday November 6, the spot market may well hit $35 per hundredweight ($700 0per short ton) soon due to limited availability and rising raw material costs, according to sources.

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.”

What to read next
Investors in the US corn and wheat markets amassed shorts in the week to Tuesday May 13, moving corn from a net long to a net short for the first time since October, data from the Commodity Futures Trading Commission (CFTC) showed late on Friday May 16.
The UK’s domestic bioethanol industry could be at risk as a result of the recent trade deal announced between the UK and the US, industry members have warned.
Learn how timber imports affect the US economy regarding Canadian softwood lumber and future trade policies.
The recent US-China agreement to temporarily reduce tariffs is a major step for global trade, with tariffs on US goods entering China dropping from 125% to 10% and on Chinese goods entering the US decreasing from 145% to 30% starting May 14. While this has boosted markets and created optimism, key industries like autos and steel remain affected, leaving businesses waiting for clearer long-term trade policies.
BEK pulp prices in Europe dropped $40/tonne in April, driven by US import tariff uncertainties and weaker demand in China.
The US-China trade truce announced on May 12 has brought cautious optimism to China’s non-ferrous metals markets, signaling a possible shift in global trade. Starting May 14, the removal of additional tariffs has impacted sectors like battery raw materials, minor metals and base metals such as zinc and nickel, with mixed reactions. While the improved sentiment has lifted futures prices and trade activity, the long-term effects remain unclear due to challenges like supply-demand pressures and export controls.