US hot-rolled coil index surges past $34/cwt

Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $34.10 per hundredweight ($682 per short ton) on Monday October 26, up by 1% from $33.76 per cwt on Friday October 23 and 2.1% higher than $33.39 per cwt a week ago on October 19.

The current price is the highest since the index was calculated at $34.22 per cwt on April 17, 2019, more than 18 months ago.

Inputs ranged from $32.50-36 per cwt.

Heard in the market
Market participants continue to expect prices to push higher while demand from the construction, automotive and general industrial sectors rises and supply remains constrained.

Lead times range from five to 12 weeks, depending on the mill, with the longest lead times at integrated mills.

One electric-arc furnace (EAF) steel producer is expected to open its order books for December delivery soon, and another EAF producer is still accepting orders for delivery in November, according to sources. 

Some market participants reported being unable to get quotes for spot buys from mills, while other sources said that when spot offers were available, they were unable to place orders for delivery before the end of the year. Some sources also noted that orders placed earlier this year for October delivery had been delayed.

And the tight supply could continue into next year, because integrated mills were expected to have little to no spot material to sell in January 2021. 

Sources said that more of next year’s production is being incorporated into contracts, a trend that will limit the amount of spot tons available in the market. And news of a cyberattack at Canada’s Stelco also was seen as likely to cause more disruptions in the market, further tightening supply.

Market participants predicted that supply will continue to be constrained until planned new capacity from mini-mills comes online or until there is a decline in demand.

Quote of the day
“There’s rising demand. Lead times are creeping out. Mills are trying to control order entry, so they say no or raise the price. If you need [material] bad enough, you pay the price. This will last until capacity is added to the market or demand ratchets back down,” a midwestern service center source said.