Pending market feedback, the launch of a South US HRC price would necessitate changing the footprint of the existing daily steel hot-rolled coil index, fob mill US (MB-STE-0184) to “US Midwest” from its current footprint of “fob US mill excluding Pacific states as defined by the US Census Bureau.”
The launch of a South US HRC price, and subsequent amendments to the existing daily US hot-rolled coil price, would allow Fastmarkets to assess the differences between the southern and midwestern markets, incorporating factors including varying raw material supply chains, steel production methods, mill capacity levels and end-market demand. Preliminary market research indicates that the difference between midwestern and southern prices has widened in recent times to around $1.00-1.50 per hundredweight ($20-30 per short ton).
Fastmarkets proposes to assess the price of the South US HRC market on a weekly basis, publishing on Wednesdays. The daily hot-rolled coil index with the new “fob mill US Midwest” footprint would continue to be published daily.
The specifications for the proposed price are as follows:
Steel hot-rolled coil index, fob mill South US, $/cwt
Quality: ASTM A1011 Commercial Steel and corresponding grades. 0.09-0.38in thick x 48-72in wide
Quantity: min 50 tons
Location: fob US mill, South states as defined by the US Census Bureau, excluding Kentucky.
Unit: USD per hundredweight
Publication: weekly, Wednesday
Notes: Standard packaging, raw materials surcharges included. Payment terms are typical commercial practice in the HRC market. Transactions that are conducted on different payment or credit terms will be adjusted back to the base specifications, taking into account discounts and standard commercial terms.
The current specifications for the daily US HRC index are as follows:
MB-STE-0184: Steel hot-rolled coil index, fob mill US, $/cwt
Quality: ASTM A1011 Commercial Steel and corresponding grades. 0.09-0.38in thick x 48-72in wide
Quantity: min 50 tons
Location: fob US mill, excluding Pacific states (Washington, Oregon, California, Alaska and Hawaii) as defined by the US Census Bureau.
Unit: USD per hundredweight
Publication: daily by 5pm New York time.
Notes: Standard packaging, raw materials surcharges included. Payment terms are typical commercial practice in the HRC market. Transactions that are conducted on different payment or credit terms will be adjusted back to the base specifications, taking into account discounts and standard commercial terms.
The following amendment to the above specifications is proposed to reflect the new regional approach:
MB-STE-0184 - Steel hot-rolled coil index, fob mill Midwest US, $/cwt
Location: fob US mill, Midwest states as defined by the US Census Bureau, plus Kentucky and Pennsylvania.
The 30-day consultation period for this proposal will begin on Monday November 28 and will end on Wednesday December 28. An update to this notice will be published on that day. Changes are scheduled to take place, subject to market feedback, beginning with a weekly assessment on Wednesday January 4.
To provide feedback on this proposed amendment, or if you would like to contribute price information by becoming a data submitter, please contact Abby Verret at pricing@fastmarkets.com. Please add the subject heading “FAO: Abby Verret, re: South HRC.”
To see Fastmarkets’ pricing methodology and specification documents, please click here.
Fastmarkets’ index methodology screens outliers and applies a quantity-weighted model to ensure that the HRC index is the most robust in the industry. Fastmarkets has no financial interest in the level or direction of the index.
