Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $51.54 per hundredweight ($1,030.80 per short ton) on January 6, bouncing back up by 2.22% after falling to $50.42 per cwt on Tuesday January 5 and 0.57% higher than $51.25 per cwt on December 30, 2020.
Inputs were received in a wide range of $50-60 per cwt, reflecting current market volatility. Inputs were received across all three sub-indices of producers, distributors and consumers. The low end of the input range represented offers and deals heard from producers and consumers, and the high end represented an assessment from a distributor. The input at the high end was automatically discarded by the outlier filter, with the remaining inputs ranging from $50-55 per cwt.
Heard in the market
Wednesday’s data showed that prices continue to hover mostly around $51 per cwt or higher, despite a dip in Tuesday’s index level. Some sources maintained, however, that material is available for $50 per cwt from certain mills for February production. It is possible that enough buyers are stepping away from the market due to fear of inflated prices, and producers are attempting to entice them back in with these relatively lower prices, they said. Not all sources had heard of transactions or offers at these levels, and some found those levels to be puzzling.
Meanwhile, it is too early to say how healthy demand is, with market participants getting back into the swing of business after the year-end holiday break, according to sources. But activity was decent at the end of last year, and most are expecting it will continue to be that way, at least for the near term. As a result, market participants still believe that these higher prices generally will last into the second quarter, boosted by decent demand, higher raw material costs and an ongoing supply shortage.
Also on Wednesday, three Detroit steelmakers entered the US domestic ferrous scrap trade for January, offering to buy prime scrap at a historic $100-per-gross-ton increase from December levels.
Quote of the day
“With anticipation of another jump in scrap prices for January – maybe by as much as $100 [per gross ton] – we might see another round of [HRC] price increases,” a producer said. He noted that prices may rival those seen in 2008; hot band peaked at $56.25 per cwt ($1,125 per ton) in May of that year.
