Supply woes, scrap gains propel US HRC price to $63/cwt

Hot-rolled coil prices in the United States have hit another all-time high, driven by supply shortages and strength in domestic ferrous scrap pricing.

Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $63 per hundredweight ($1,260 per short ton) on Thursday March 4, up by 1.04% from $62.35 per cwt on Wednesday and by 1.86% from $61.85 per cwt on February 25.

Inputs were received across all three sub-indices in a range from $60-65 per cwt, inclusive of mill offers and general assessments of current spot market price levels.

Heard in the market
A worsening supply crunch, along with emerging strong upside in prime scrap prices in the March raw material trade, have worked in tandem to push Fasmarkets’ daily index to a new all-time record.

Sources said there are no immediate signs that the meteoric rise in hot band prices will abate anytime soon.

A southern service center source expects domestic producers to increase prices once this month’s scrap trade settles, with Detroit entering the market up $70 per gross ton on prime grades.

One end user source noted that producers in the US South are four to six weeks behind schedule, and the volume of imported hot band entering the market is not sufficient enough to pressure domestic prices.

Furthermore, with demand from key steel-consuming industries remaining strong, sources said the current bull market should have staying power through the end of the second quarter of this year.

Quote of the day
“I’m very worried about supply,” a consumer source said. “Steel is like searching for toilet paper during the initial onslaught of the Covid pandemic – shelves [are] all empty.”

What to read next
A big question mark for Brazilian containerboard market participants right now is the impact the Rio Grande do Sul floods will have on demand in the country. Although hard to estimate, especially amid reduced gross domestic product (GDP) forecasts, we still believe that the floods will have a somewhat limited impact on the demand for […]
North American softwood lumber exports to offshore destinations posted mild gains in the first quarter, sustaining the momentum evident in the second half of 2023. Want to predict the future of the lumber market? Learn more about our short-term and long-term forecasts and asset analysis for the global forest products market today. Learn more. Canadian exports overseas reached […]
Fastmarkets invited feedback from the industry on the pricing methodology for its International Organization of Securities Commissions (IOSCO)-audited ferrous scrap materials, via an open consultation process between April 4 and May 6, 2024. This consultation was done as part of our published annual methodology review process.
Here are the four key takeaways from the US scrap market participants in our May survey
The Mexican government’s decree, which updated and, in some cases, introduced new import tariffs ranging from 15% to 35% on 21 packaging and paper products, went into effect on Tuesday April 23. According to the decree, the measure, which is valid for all countries, is set to last two years from April 23, therefore, until […]
What factors are driving the significant downturn in US housing starts, accompanied by a decrease in building permits?