Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $33.17 per hundredweight ($663.40 per short ton) on Friday October 16, up by 1.4% from $32.72 per cwt on Thursday and by 3.7% from $32 per cwt on October 9.
This is the highest level since the index was calculated at $33.80 per cwt on April 23, 2019.
Heard in the market
Inputs ranged from $32-35 per cwt, and were received across all three sub-indices for producers, distributors and consumers.
Producers appear to be in the process of increasing prices via direct offers to customers without relying on the typical price hike announcements via letters to customers. This implies that market fundamentals are strong enough to support higher prices because the mills do not need to convince customers of that, according to market participants. Indeed, producers are not budging on offers, while inventory levels remain relatively low and shipments are up, sources said.
Some mills are not yet willing to offer quotes for small, last-minute spot tons that could be available for December, according to buyer sources. Several buyers agreed that prices are likely to continue to increase at a relatively fast clip for at least the next few weeks, if not longer. Some of those buyers believe that prices will remain strong through the end of the year.
Quote of the day
“We have been advised that there is no guarantee of December-ship tons,” a steel buyer said. “We are getting to the point where import offers are becoming attractive again for spot market customers. I have seen this cycle several times before, where the steel mills run up prices as high as possible until the market crashes and orders are canceled. I don’t expect anything different this time around, even with the pandemic flaring up again.”
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