US hot-rolled coil index continues to slide; spot activity thins

Hot-rolled coil prices in the United States declined for the second consecutive day due to diminishing spot market activity and a lack of availability from steel producers, according to market participants.

Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $33.52 per hundredweight ($670.40 per short ton) on Wednesday October 28, down by 1.1% from $33.89 per cwt on Tuesday October 27 and nearly flat from $33.57 per cwt a week ago on October 21.

Heard in the market
New inputs were received in a range from $32.50-34.50 per cwt. The higher end of that range represents offers from mills.

Lead times, which sources had previously put in a wide range of between five and 12 weeks, were unclear while market participants wait for mills to open their January 2021 order books.

Market sentiment was mixed, with some participants expressing concern that spot activity was thinning due to longer lead times and a lack of spot tons from several producers.

Some market participants indicated that business and inquiries were steady but that they faced challenges passing increased steel prices to their own customers, while others said they were staying out of the spot market due to higher prices and instead intended to secure tonnages primarily via 2021 contracts.

Some sources also questioned the sustainability of recent high prices and predicted that market activity would slow.

Quotes of the day
“I think HRC is ending its run of increases,” one steel distributor said. “It seems the market is starting to slow down; I think that will continue until the beginning of 2021 and then improve very slightly.”

“I don’t see spot availability from domestic mills at this moment. I think domestic mills are going to open January bookings soon,” a second steel distributor said. “I don’t think I will go after spot buying at the current market level. Certainly, people who don’t secure contract allocation with domestic mills do not have any other option but to buy in spot.”

Index calculation
Data was carried over in the producer and consumer sub-indices because of a lack of new inputs there. 

What to read next
Fastmarkets has corrected its MB-CU-0302 copper scrap No1 copper, buying price, delivered to brass mill US, US cents/lb, which was published incorrectly on Tuesday April 9.
Fastmarkets is inviting feedback from the industry on the pricing methodologies for its steel hot-rolled coil index domestic, exw Northern Europe, €/tonne (MB-STE-0028) and steel hot-rolled coil index, fob mill US Midwest, $/cwt (MB-STE-0184) as part of its annual methodology review process.
The London Metal Exchange has reaffirmed its position on low-carbon nickel pricing, highlighting challenges concerning market scale and definitions, it said in a notice issued to its members on Tuesday March 5
The publication of Fastmarkets’ US and Brazil pig iron price assessments for Friday Feb 23 were delayed because of an administrative error.
Fastmarkets has amended the formula for its MB-AL-0231 — aluminum P1020A all-in price, delivered Midwest US, US cents/lb to include the London Metal Exchange official cash AM bid aluminium price effective immediately.
An interview with Terry Webber, vice president of industry affairs at AF&PA on product recyclability, forest management and legislation