Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $28.62 per hundredweight ($572.40 per short ton) on Friday September 18, up by 0.4% from $28.50 per cwt a day earlier on September 17 and 3.5% higher than $27.65 per cwt a week earlier on September 11. The index now stands at its highest since it was calculated at $28.73 per cwt on March 16.
Heard in the market
Inputs were received in a range from $27-30 per cwt, a spread of $3 per cwt. The higher end of that range represented mill offers, although no buyers had confirmed transactions at that level.
Some buyers said they did not need to pick up tons at current prices, and predicted that prices will drop in coming months before they will need to restock. Still, other buyers forecast that prices could remain fairly strong through the end of the year, until Big River Steel’s second electric-arc furnace in Osceola, Arkansas, is scheduled to come online, and planned and unplanned outages start to have less of an impact on supply.
Demand remains the main wild card either way.
While business activity typically slows during the fourth quarter and during the year-end holiday season, U.S. Steel, Steel Dynamics Inc and Nucor separately released earnings guidance for the third quarter of 2020 this past week, with each noting that demand has been improving.
Quote of the day
“People are bewildered about how strong and long this is going to last,” a West Coast trader said about the current market rebound. “They are definitely bullish about buying in general, but they think it’s a mills’ market right now and there is limited negotiating power.”
Index calculation
The assessor rolled over transactional and non-transactional inputs in the producer and consumer sub-indices due to a lack of liquidity there.
Dom Yanchunas in New York and Michael Cowden in Chicago contributed to this report.
Join Fastmarkets at this year’s virtual “Steel Success Strategies Online” between October 26-28. Click here to sign up.
