US hot-rolled coil index slips from record high to under $57/cwt

Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $56.92 per cwt ($1,138.40 per ton) on January 15, down by 1.86% from a record high of $58 per cwt the previous day but up by 9.23% from $52.11 per cwt on January 8.

Inputs were received in a range of $50.50-60.00 per cwt across all three sub-indices – including producers, distributors and consumers – representing assessments of current spot pricing levels, mill offers and confirmed purchasing activity. Three inputs were discarded because they were outside of the geographic footprint of the index. The assessor carried over one transactional input each in the producer and consumer categories due to significant day-to-day volatility there.

Heard in the market
Despite the index slipping day on day, sources predicted that hot band prices would reach new peaks in the first quarter of 2021 because demand continues to outpace supply.

Some market participants expect prices to drop in either the second quarter or the second half of the year, once new production – such as from Big River Steel’s Phase 2 expansion and Steel Dynamics Inc’s new flat-rolled electric-arc furnace mill in Sinton, Texas – comes online.

US hot-rolled coil imports from South Korea and Turkey, as well as other exporters, also are expected to increase during the first half of the year.
Quotes of the day
“We are in uncharted waters,” a Great Lakes distributor said. “There was a lot of denial in the market about the validity of the move higher, so people have gone short, short, short. Now they are stuck.”   

“The mills are throwing out numbers based on what they think they can get – and are getting it,” a West Coast distributor said. “With limited to no spot, they can do this.”