Hot-rolled coil prices in the United States climbed over $40 per hundredweight ($800 per short ton) for the first time since 2018 after more buyers chased fewer spot tons at the domestic mills.
Fastmarkets' daily steel hot-rolled coil index, fob mill US was calculated at $40.44 per cwt ($808.80 per ton) on Tuesday December 1, up by 1.53% from $39.83 per cwt on Monday November 30 and an increase of 3.48% from $39.08 per cwt one week earlier.
Inputs were received in a range of $39-42.50 per cwt. This range represents confirmed deals, mill offers and general assessments of current spot market pricing levels.
Heard in market
Sources report that buyers are in dire need of hot-rolled coil, but it is very difficult to find spot availability at the domestic mills for January 2021 shipment.
The anticipated increase during the December ferrous scrap trade is another factor in the ascent of the coil pricing. US mills therefore have tremendous leverage to stand firm on higher pricing - and they are doing just that, according to sources.
The HRC index now has gained 18.49% in a month and stands at its highest since the price was calculated at $40.82 per cwt on November 9, 2018.
Quotes of the day
"It's shortages everywhere," a midwestern distributor said. No matter the price, "if somebody is willing to sell you steel, you say: 'Yes, thank you.'"
"I think the mills are creating this shortage and long lead times as they try to recoup for their losses over the past year or so," a second midwestern distributor said. "Manufacturing is getting busier along with automotive, appliance, etc, but not to the point we are lacking capacity. This is a perfect storm being created without the rain clouds."
Index calculation
Inputs at the top end of the range were discarded because sources reported that the quotes came from a mill that had no spot availability to fulfill a purchase order. The assessor carried over a non-transactional input within the producer sub-index due to a lack of liquidity there.