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
The European sack kraft paper market continued to warm into the spring as optimism improved, especially among producers, and price increases for both bleached and unbleached sack kraft paper were applied as Q2 got underway. The UK saw increases of £40/tonne on unbleached paper and £40/tonne on bleached paper, the first of what some contacts […]
Fastmarkets will amend the frequency of its aluminium low-carbon differential P1020A, US Midwest and its aluminium low-carbon differential value-added product, US Midwest as of the assessment on Friday May 3.
After a consultation period, Fastmarkets has amended the publishing frequency of the Pakistan shredded steel scrap import index from weekly to twice per week.
Prices for old corrugated containers (OCC) in Mexico were unchanged in April, with imported grades remaining stable month over month for the first time this year, Fastmarkets has learned. Prices for imported OCC held at $120-130 per ton. The firm pricing follows $10-per-ton increases in March and January as well as a $15-per-ton rise in February. […]
Fastmarkets will amend the frequency of its price assessments for MB-STE-0879 Steel scrap H2 Japan origin import, cfr South Korea and MB-STE-0880 Steel scrap HMS 1&2 (80:20) deep-sea origin import, cfr South Korea on Friday April 12.
Fastmarkets FOEX would like to thank those who took the time to respond to the consultation. Fastmarkets FOEX did not propose any changes to the methodology. The feedback was fully supportive of the current methodology. To summarize, this open consultation does not lead to material changes in the current methodology. A newly dated methodology document […]