US hot-rolled coil index steady, finishes week above $34/cwt

Hot-rolled coil prices in the United States ended the week to Friday October 30 above $34 per hundredweight ($680 per short ton), holding mostly flat after weeks of steady increases.

Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $34.13 per cwt ($682.60 per ton) on October 30, down by 3 cents from $34.16 on Thursday October 29 but up by 3 cents from $34.10 per cwt at the start of the week on Monday October 26.

Heard in the market
Fresh inputs were received in a range between $32.50 per cwt and $36 per cwt. Sentiment among consumers and distributors was that current pricing and demand levels should remain more or less stable for the near term.

Indeed, analysts at KeyBanc Capital Markets project a modest upside for prime scrap grades during November’s ferrous scrap trade, which may help shore up spot hot band prices, according to an October 25 research note.

“Obsoletes are expected to hold firm, [while] prime grades are expected to increase [by roughly] $10 per tonne as EAF [electric-arc furnace] sheet mills such as Big River, Nucor and Steel Dynamics accumulate scrap for existing production and future production on new capacities,” the analysts wrote.

But some sources said that additional capacity coming online - from Big River Steel as well as JSW Steel USA - may result in supply outweighing demand, potentially pressuring prices lower, and others said that increasingly competitive offers for Turkish and South Korean coil may entice domestic buyers to source material from overseas suppliers.

Quotes of the day
“I think we are at or near the peak of this cycle,” a consumer source said. “We will know for certain in the next few days.”

“My prediction is that, if flat roll demand stays at current levels, we will see a gradual rise over the next two to three months,” a second consumer said. “Scrap typically settles up in the winter months, and there is no relief on the supply side until Big River gets cooking or imports arrive [in] probably February, March 2021.”

Index calculation
Inputs from both integrated and electric-arc furnace producers were carried over within the producer sub-index due to a lack of liquidity.

Sign up here for Fastmarkets’ free webinar on November 4, 2020, beginning at 9am GMT: ‘European flat steel market - on the mend after the Covid-19 fallout?’
- Overview of EU flat steel price developments in 2020 so far
- Suppliers’ response to the drop in demand
- Fortress Europe? Toughening of trade defense measures
- The survival of European steelmakers facing high raw material costs
- Demand contraction and a slow path to recovery
- Near-term price outlook

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