Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $55.51 per hundredweight ($1,110.20 per short ton) on Thursday January 21, down by 1.02% from $56.08 per cwt the previous day and a decrease of 4.29% from a historic high of $58 per cwt one week earlier.
Inputs were collected in a range from $50-58 per cwt, representing confirmed deals, mill offers and general assessments of spot market pricing levels.
Heard in the market
While pricing has started to level off after hitting record highs last week, sources agreed that the principal dynamics currently shaping the hot-band marketplace were still in place. Indeed, lead times remain extended at eight to 12 weeks, while spot market activity has continued at a steady pace since picking back up in the wake of the initial Covid-19 lockdowns.
Some sources maintained that pricing will recede as hot band supply becomes less tight and production levels rise to meet demand. But for the time being, surging demand from the automotive end market has yet to slacken, and both mill and service center inventories remain low.
Market participants also were not concerned about domestic buyers turning to competitively priced imports, citing long lead times and the possibility of softening US prices as reasons to shy away from procuring foreign hot band.
Quotes of the day
“Demand [is] really good and inventory low, so nobody is slowing down their buying,” a mill source said.
“Our inventory is still very low, mainly because of late orders across the board and probably more with the integrateds,” a Midwest service center source said. “Automotive has been overwhelming the integrated mills.”
“I have a feeling we will see a positive surprise in demand as we go through 2021 with all the money and stimulus that is going around, but I am not willing to bet on big imports when I know domestic capacity and global raw materials will start to get inventories back into balance,” one end user said.
Grace Lavigne Asenov in New York contributed to this report.