US HRC price rises to near record; spot tons coveted
Hot-rolled coil prices climbed to within $3.80 per ton of its record high after steel buyers vied for the few spot tons that trickled out from domestic mills.
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $57.81 per hundredweight ($1,156.20 per short ton) on Tuesday February 2, up by 2.2% from $56.56 per cwt on Monday and by 3.1% from $56.06 per cwt on January 26. This marks the second-highest level on record since Fastmarkets began collecting HRC data in 1960, with the all-time high of $58 per cwt recorded on January 14.
Data were collected in a range of $54-62 per cwt, representing confirmed deals, mill offers and general assessments of spot market price levels. Fresh inputs were received across all three sub-indices.
Heard in the market
Hot-rolled coil lead times are still generally reported to be at least eight weeks, although persistent buyers are able to find occasional availability offered for March rollings while mill personnel find a way to wedge a few additional spot orders in between their contract-tonnage commitments. Other buyers are still receiving no spot offers from any mills.
Some market participants expect April availability to be just as tight as March. After that, mills might try to adjust the timing of maintenance outages in whichever direction helps them maintain their pricing advantage. Either they will postpone outages to keep producing while prices are near historic highs, or they might pull forward some maintenance work to reduce output if they feel the need to keep prices from retreating too rapidly, sources said.
While some buyers acknowledge that their inventories are still too lean, others said they have slowed restocking because downstream customers are reacting negatively to the spike in steel prices by canceling orders and slowing their own projects.
Quote of the day
“I believe the market remains strong enough to hold pricing for the next four months,” an East Coast distributor source said. “Once we get to the summer slowdowns, this may all change. And the lack of foreign [steel] gives the domestic mills all the power they need to keep the prices up.”