Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $29.78 per hundredweight ($595.60 per short ton) on Monday, up by 4.1% from $28.62 per cwt on Friday and by 8.5% from $27.44 per cwt on September 14.
This marked the highest level for the index seen it reached $30.21 per cwt on March 6, just before prices plunged due to the outbreak of the Covid-19 pandemic.
Inputs were received in a range of $28-32 per cwt. An offer at $32 per cwt was discarded because it could not be confirmed.
Both the higher and lower ends of the range represented mill offers. Reported transactions were closer to the midpoint of the range.
Heard in the market
Market participants said they expected prices to remain high due to supply constraints while demand has been steady.
Mills, distributors and buyers reported a shortage of supply in the spot market.
Lead times were reported at five to eight weeks.
Production outages, backlogs and disruptions were said to be the key causes of lower supply levels.
A supply shortfall coupled with steady demand pushed inventories to very low levels at service centers, market participants said.
Some sources indicated that this shortfall might worsen, with buyers said unable to get the full quantity of tons needed and a rise in demand predicted for October.
Some market participants expect softer demand in November and December, a time of the year when demand typically declines.
Quote of the day
"Things escalated rather quickly in this market. One day I cringed at paying $500 [per ton] for HRC and last week I actually transacted at $600 [per ton]," one steel consumer source said.