US HRC price nears $35/cwt; mills said mulling big hikes for 2021 volumes

Hot-rolled coil prices in the United States are within striking distance of $35 per hundredweight amid speculation that January order books could be opened at substantially higher figures.

Fastmarkets daily steel hot-rolled coil index, fob mill US was calculated at $34.82 per cwt ($696.40 per short ton) on Thursday November 5, up by 0.9% from $34.52 per cwt on Wednesday and by 1.9% from $34.16 per cwt on October 29.

US HRC prices now stand at their highest point since reaching $34.88 per cwt on March 18, 2019.

Heard in the market
Inputs were received in a narrow band of $33.50-35 per cwt and across all three sub-indices: Producer, distributor and consumer.

While some mills still have availability in December, others have closed their order books for 2020 – some without taking spot orders in December – and have yet to open them for January, market participants said.

And there are rumors that mills could open January order books with HRC prices up to $37-39 per cwt, sources said.

Higher prices would be supported by strong automotive demand – evidenced by strong earnings at General Motors Co, extremely limited spot supplies and lean inventories across the supply chain. Also providing support are lingering furnace problems at some integrated mills and longer than expected maintenance outages at electric-arc furnace (EAF) producers – issues that continue to squeeze supplies, some sources said.

But other sources said that prices could be nearing a plateau despite those factors. One potential catalyst for a slowing of the three-month bull market for steel is import competition, if mills raise prices too aggressively. And imports could become an even bigger issue if President Donald Trump wins a second term or Joe Biden wins and eases Section 232 trade barriers, sources said.

Also, increased domestic supplies – resulting from new capacity coming online, upgrades to existing facilities and idled capacity restarting – could also pressure prices, they said.

And while some said a shift in consumer spending toward steel-intensive goods – including cars and appliances – will continue to drive demand, others cautioned that activity could slip if a gridlocked US government fails to deliver another round of stimulus and if demand from the oil and gas sector remains weak.

Quote of the day
“We see a lot of people scrambling for steel,” one mill source said. “If they don’t take it [at the initially offered price], they come back a few days later and ask if it’s still available.”

Dom Yanchunas in New York contributed to this article.

What to read next
The United States' copper recycling industry is ramping up pressure on policymakers to impose some form of export controls on high-purity copper scrap, arguing that current trade dynamics – particularly with China – are distorting prices, weakening domestic capacity and undermining national security goals.
After a month-long consultation period, Fastmarkets is amending the below specifications, following no negative feedback from market participants and internal data analysis. The following changes will take place: The new specifications are as follows, with amendments in italics: MB-CU-0002 Copper grade 1 cathode premium, ddp Midwest US, US cents/lb Quality: Grade A 99.9935% min copper cathode conforming to LME […]
Explore the implications of the 50% tariff on the pulp market, impacting trade dynamics and costs for industries reliant on pulp.
The global copper market has finally received the widely anticipated news that imports to the US will be tariffed from August 1. The finer details of the tariffs, including their scope, and whether key copper-exporting nations like Chile, Canada and Peru will be exempt, remain unclear.
Understand how recent tariff decisions are affecting the European pulp and paper industry and trade with the US market.
Mexico’s production and consumption of long steel fell year-on-year in May due to weakness in the country's construction sector, but posted a month on month gain, according to the latest data from the Mexican steel chamber, CANACERO.