Hot-rolled coil prices in the United States again edged lower, even as buyers have continued to struggle to find spot tonnage at the domestic mills.
Fastmarkets' daily steel hot-rolled coil index, fob mill US was calculated at $55.04 per hundredweight ($1,100.80 per short ton) on Friday January 22, down by 0.85% from $55.51 per cwt the previous day and 3.30% lower than $56.92 per cwt a week prior.
Inputs were collected in a range from $53-64 per cwt, with the low end representing assessments from distributors and consumers and the high end representing deals heard for smaller volumes. An input at the high end of the range was automatically discarded by the outlier filter. Transactional data was carried over in the producer sub-index due to a lack of liquidity there.
Heard in the market
Sources reported that there was still a shortage of spot material, with some distributors and consumers able to purchase only a fraction of the material they need. The surge in prices and lack of supply are opening the door for imports, some respondents said.
Sources were split between those projecting that the rally is coming to an end and others expecting prices to climb further. Respondents who think the rally has run its course pointed to weakness in the ferrous scrap market and a decline in Chinese flat-rolled prices. Sources who anticipate additional price increases were focused on tight supply, and did not see any indications that the situation will change during the first quarter.
Quotes of the day
"Buyers' expectation is for a price correction in May; therefore, they will be very cautious from now on," an East Coast trader said. "Adding the fact that lines of credit are being stretched out, we could see a slowdown of demand in the near term, which in turn will put pressure on prices."
"This price is for those who are desperate and didn't plan ahead," a Great Lakes distributor said.
"There is going to be a major correction," a southern service center source said. "The good news is that inventories are low, so when it falls people won't be as badly hurt as they were in 2008."
Grace Lavigne Asenov and Patrick Fitzpatrick, both in New York, contributed to this report.