Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $51.71 per hundredweight ($1,034.20 per short ton) on Monday January 4, up by 0.4% from $51.50 per cwt on December 31 and by 21.6% from $42.53 per cwt one month ago. This continues to represent a more than 12-year high, last exceeded on August 20, 2008, when the price reached $53 per cwt.
Inputs were received in a range of $50-55 per cwt from distributor sources only. An input at the low end of that range was discarded since it was thought to be reflective of a price no longer available in the current spot market.
The assessor carried over non-transactional inputs in the producer and consumer sub-indices due to a lack of liquidity.
Heard in the market
Spot market availability remains very limited. Following suit from December, the key watch point for the market is the upcoming monthly ferrous scrap trade.
Prices for prime scrap, a key input material in the production of hot-rolled coil, could increase by as much as $100 per ton at the conclusion of this month’s trading, sources have told Fastmarkets.
Sources anticipate this will lead mills to quietly communicate base price increases to customers, which could eventually prompt pushback from end users. And end users might look for more cost-effective options, such as importing steel, while surging coil prices within the US diverge from the world market.
Such resistance has yet to materialize, however.
Quotes of the day
“Looks like early 2021 is going to be pretty good for the mills… They’ll certainly try to get their money out of [scrap],” a southern service center source said.
“[Mills are] good for another $80-100 a ton when they open up because you have this bump in scrap,” a distributor in the western US said.
“We’ll start to see end users say we’re not going to pay that,” a second southern service center source said of scrap-driven pricing volatility. “That’s the inflection point we’re getting to. We’re starting to hear those rumblings in the market.”
Grace Lavigne Asenov and Dom Yanchunas, both in New York, contributed to this article.
