US hot-rolled coil index climbs further

Hot-rolled coil prices in the United States have risen to their highest in almost exactly two years after more buyers perceived that a true steel shortage is intensifying for the end of 2020 and the beginning of the first quarter of 2021.

Fastmarkets’ daily hot-rolled coil index, fob mill US was calculated at $39.08 per hundredweight ($781.60 per short ton) on Tuesday November 24, up 0.7% from $38.80 per cwt on Monday November 23, and a jump of 7.7% from $36.31 per cwt one week earlier. 

The index is at its highest point since rising to $39.33 per cwt on November 21, 2018 – when the US market was in the throes of a supply scramble due to the advent of President Donald Trump’s Section 232 order. 

Inputs were received in a broad range of $37-42 per cwt. The higher end of the range represents mill’s newest offers, while the lower end of the range represents sources’ assessments based on the most recent spot transactions.

Heard in the market
Lead times for spot tons are thought to be deep into January or February.

Market participants reported that mini-mills have sharply increased their offers as a result of a dearth of spot availability in the January shipment window. Mini-mills are further emboldened because at least one of their integrated-mill competitors has slowed production in reaction to Covid-19 outbreaks among its steelworkers, source said.

Some distributors simply cannot find a supplier to sell them coil on a spot basis, and that lack of tonnage has disrupted the ability of steel-consuming manufacturers to procure material, threatening to halt their enterprises. Any newly-identified import sources will not arrive in time to alleviate the shortage, sources said.

Quote of the day
“If there is no availability, the mills can charge whatever they want. The sky is the limit,” a midwestern distributor said. “The distributors are effectively starting to shut down some customers. Any consumer who has not secured a source of steel will not find anyone to sell steel to them. That’s already happening. Everyone will be effectively slamming on the brakes here… The effects of the 232 are still in place, and the import is limited, so this is worse than 2018.”

Index calculation
Data reflecting the offers at the highest end of the range were discarded due to a lack of confirmation of any immediate transactions at those levels. The assessor carried over non-transactional inputs within the producer sub-index due to a lack of liquidity. The assessor carried over one non-transactional input in the consumer sub-index due to fresher data at a level not yet judged to be accepted by buyers.

What to read next
Fastmarkets’ SBQ price assessments and monthly forecast provide much-needed clarity and a benchmark for buyers in the steel industry to use for planning and negotiation.
American Chambers of Commerce (Amcham) across Latin America are calling for urgent negotiations to prevent the escalation of trade tensions between their countries and the US, following the announcement of sweeping 50% tariffs by President Donald Trump.
Explore the latest trends in lumber markets as vacation time and economic uncertainty impact sales and trading activity.
The lower end of the price range for Biodiesel SME B100 fob US Gulf price on Friday July 18 was erroneously published at $2.243 per gallon. This has been corrected to $4.243 per gallon. Fastmarkets’ pricing database has been updated to reflect this change. These prices are part of the Fastmarkets Ags oils, fats and biofuels price […]
Fastmarkets has corrected its MB-BMS-0015 Black mass, NCM/NCA, payable indicator, nickel, exw USA, % payable LME Nickel cash official price, which was published incorrectly on Wednesday, July 16.
This strategic launch is designed to better delineate the relationship between these two competing steelmaking materials. The differentials offer the market a single reference price denoting the spread between Turkey import billet and No1 and No2 heavy melting scrap (80:20) and between Turkey import billet and shredded scrap exported from the US East Coast respectively. […]