US Hot-rolled coil prices have again jumped to a year-to-date high, after reaching a nearly 16-month peak on Friday October 2, supported by continuing tight supply in the face of slowly rising demand.
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $31.55 per hundredweight ($631 per short ton) on Monday October 5, up by 1.8% from $30.99 per cwt on Friday and 5.1% higher than $30.02 per cwt a week ago on Monday September 28.
The price is now at its highest since May 10, 2019 – nearly 17 months ago – when the index was calculated at $32.04 per cwt.
Inputs from sources ranged between $29.50 per cwt and $32.50 per cwt, with most inputs clustered closer to $32 per cwt.
*** Heard in the market
Market participants continue to expect prices to push higher due to a combination of slowly rising demand and steps taken by mills to limit supply. Lead times averaged eight to nine weeks, with no availability until the first week of December.
Cleveland-Cliffs’ acquisition of ArcelorMittal USA is not expected to affect mill supply positively or negatively until the first quarter of 2021, when Cleveland-Cliffs will take control of its new mill assets, sources said.
Offer prices from mini-mills have increasingly moved higher, approaching those from integrated mills, and a series of price increases from the mills have been holding up in the marketplace due to demand continuing to inch up in the face of restricted supply, sources said.
Market participants indicated that demand has been rising across the board, but noted that demand from the automotive sector was the strongest while the oil sector has been weaker.
According to some sources, mills are not operating anywhere near their output capacity, but have been limiting production to keep supply tight and support their efforts to raise prices.
Some mills have not yet restarted idled capacity, while others have taken downtime for routine maintenance.
*** Quote of the day
“The price is $650 [per short ton], take it or leave it. I’ve not seen anybody break that. We’ve tested. They are holding everyone to the maximum or the average of your contract through the course of the year. The market is better – no question about that – but it’s not as robust as mills are able to raise prices,” a southern distributor source said.
*** Index calculation
The assessor rolled over an input from the October 2 consumer sub-index due to a lack of transactional data.
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