US hot-rolled coil index above $710/t – but for how long?

Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $35.64 per hundredweight ($712.80 per short ton) on Wednesday November 11, an increase of 0.5% from $35.46 per cwt on Tuesday November 10 and up by 3.2% from $34.52 per cwt a week ago on November 4.

The current price is the index’s highest since it was calculated at $35.78 per cwt on January 8, 2019.

Heard in the market
Inputs were received in a range of $35-38 per cwt. The higher end of that range represents mill offers for January 2021 and into February 2021.

Most market participants indicated that lead times had stretched out to January. 

Sources remained concerned about spot availability when the mills formally open their order books for January shipments.

Some market participants questioned the sustainability of the current high hot band prices, noting that imports expected to come into the United States in the first quarter of next year – and new and restarted capacity coming online – could ease the current supply shortfall and weigh on prices. Still, others said the lack of available spot material may last longer than expected. 

Quotes of the day
“I think that our hot-rolled market is going to get to be a nightmare, worse than it already is. People are going to run out of steel,” one steel distributor said. “I think availability will stay constrained a lot longer than anybody realizes.”

“It’s not like we haven’t seen this movie before; [mills] run prices up high and then it crashes and they wonder what happened,” one consumer said. “When everyone is done with outages and capacity comes back, what is that going to do to the market?”