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Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $28.50 per cwt on Thursday September 17, up by 1.6% from $28.06 per cwt on a day earlier and by 4% from $27.40 per cwt on September 10.
The index has not been at or above $28.50 per cwt since reaching $28.52 per cwt on March 17 – around the time that major North American automakers stopped output in response to the virus crisis.
Heard in the market Inputs were received across all three sub-indices, and ranged from $26-31 per cwt.
The higher end of that range was largely representative of mill offers, but deals were reported at both the high and low ends of the range.
While some sources said $28 per cwt was no longer in the market, others said certain mills were still cutting deals below that level.
Prices around $30 per cwt could become common if buyers become more concerned about securing limited spot tons than about price, some market participants said.
Spot availability remains limited at some mills due to long lead times, outages and idlings, and producers having accepted large orders over the summer months, when prices were in the low $20s-per-cwt range.
US mills have since announced price increases of at least $100 per ton since late August – aided in part by higher scrap costs and extended lead times.
Lead times are between four and 10 weeks – so into November at most mills, and effectively into December at some, sources said.
And long lead times were observed at both integrated mills and electric-arc furnace (EAF) producers, they said.
EAF mills typically have shorter lead times than integrated producers.
While some sources predicted that such factors should keep prices moving upward, others expressed concern that the steep gains since this summer – HRC prices are up 29.8%, or $6.55 per cwt, since reaching $21.95 per cwt on July 23 – had caused sticker shock. That could keep buyers on the sidelines and out of the spot market, they said.
Some sources also expressed concern that if mills try to drive prices significantly above $30 per cwt, it could attract imports or result in prices falling just as quickly as they rose – especially given low capacity utilization rates and with new capacity coming online later this year and into next year.
Quote of the day “Mills will force people to the sidelines raising prices this quickly, with steel for September coming in under $22 and now spot numbers [of] $29-30 [per cwt],” one Midwest service center source said.
Elizabeth Ramanand and Dom Yanchunas, both in New York, contributed to this article.