MethodologyContact usSupportLogin
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $56.86 per hundredweight ($1,137.20 per short ton) on Tuesday January 19, little-changed from $56.92 per cwt on the prior business day – Friday January 15 – and an increase of 2.05% from $55.72 per cwt a week earlier on January 12.
Inputs were received in a wide range of $50-60 per cwt, representing offers and assessments of current spot pricing levels from distributors and consumers. An input at the low end of the range was eliminated at the assessor’s discretion because there was no corroborating evidence that such a price was still available. Data representing an offer and a deal was carried over in the producer sub-index due to a lack of liquidity in that sub-index.
Heard in the market Sources reported a continued acute shortage of spot material, with service centers and end users sometimes able to procure only a fraction of the tonnage they need to operate.
Customers have begun to cancel orders and turn down work either because they cannot afford the expensive steel or because they believe a pricing correction is on the horizon, possibly in the second quarter. Some sources cited a potential retreat in the ferrous scrap trade, while others thought that lower scrap settlements would not necessarily lead directly to an immediate slide in coil pricing. Some mills are expected to begin quoting spot pricing soon for March/April shipments.
Sources agreed that the wide price variance in the very few reported spot deals was a contributing factor in the HRC index spending the past week lurching up and down between about $55 per cwt and $58 per cwt, the all-time high achieved on Thursday January 14.
Quotes of the day “People who are paying attention to their inventory and trying to rationalize that with a business plan, good luck!” one midwestern distributor said.
“The mills have become very crafty in trying to keep the mania alive. The longer it appears there is a shortage, the longer they can cash in on insane profit margins,” a second midwestern distributor said. “We are seeing imports become much more attractive.”
“Prices are getting a bit crazy because only a few spot tons are setting the market, but I am not seeing major relief,” one steel consumer stated. “Automotive is running at their highest levels through first quarter, so no one is able to get their inventories caught up, which should keep buying steady in the second quarter – not to mention the mills are pretty dialed-in on contractual commitments.”