Fastmarkets daily steel hot-rolled coil index, fob mill US was calculated at $34.16 per cwt ($683.20 per ton) on Thursday October 29, up by 1.9% from $33.52 per cwt on Wednesday October 28 but little-changed from $34.10 per cwt at the beginning of the week.
Heard in the market New inputs were received in a range from $34-39 per cwt. An input at the high end of that range was discarded by the index’s outlier filter. Fresh deals were mostly around approximately $35 per cwt.
Despite day-to-day volatility within the HRC index, sentiment among market participants was largely unchanged. Lead times remain long and spot supplies limited, so mills have a strong hand in pricing talks, sources said.
Some mills have closed their order books for November and not opened opened for December yet. Others have closed their books for 2020 and not opened for 2021 yet. And some producers with a few tons left available for November shipment appear to be charging a premium for that material, sources said.
Mills also have little reason not to hold the line on spot offers, because contract negotiations are expected to drag on at least past the US federal elections next week if not longer, sources said. And because contracts are typically set at a discount to spot tags, mills will be reluctant to lower prices, they noted.
While sources generally agreed that prices would likely move higher in the short term, there was disagreement about whether prices would continue to rise in the first quarter of next year. Some sources think prices will climb further on stronger-than-expected demand, historically low inventories along the supply chain and mill consolidation.
But prices also could begin to slip next year, sources said, citing Brazil’s Section 232 slab shipment quota resetting, new capacity coming online, idled capacity restarting – and the potential for election uncertainty or a surge in Covid-19 infections to harm the overall economy.
Quote of the day “There is literally no available tonnage for December,” one East Coast service center source said. “It’s kind of a perfect storm we’re in right now with low inventory all along the supply chain.”
Index calculation Inputs were carried over in the producer sub-index so that pricing from both integrated and electric-arc furnace producers would be represented. Data was also carried over in the distributor sub-index because of unusual day-to-day volatility there.
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