US hot-rolled coil index continues to slide; spot activity thins
Hot-rolled coil prices in the United States declined for the second consecutive day due to diminishing spot market activity and a lack of availability from steel producers, according to market participants.
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $33.52 per hundredweight ($670.40 per short ton) on Wednesday October 28, down by 1.1% from $33.89 per cwt on Tuesday October 27 and nearly flat from $33.57 per cwt a week ago on October 21.
Heard in the market
New inputs were received in a range from $32.50-34.50 per cwt. The higher end of that range represents offers from mills.
Lead times, which sources had previously put in a wide range of between five and 12 weeks, were unclear while market participants wait for mills to open their January 2021 order books.
Market sentiment was mixed, with some participants expressing concern that spot activity was thinning due to longer lead times and a lack of spot tons from several producers.
Some market participants indicated that business and inquiries were steady but that they faced challenges passing increased steel prices to their own customers, while others said they were staying out of the spot market due to higher prices and instead intended to secure tonnages primarily via 2021 contracts.
Some sources also questioned the sustainability of recent high prices and predicted that market activity would slow.
Quotes of the day
“I think HRC is ending its run of increases,” one steel distributor said. “It seems the market is starting to slow down; I think that will continue until the beginning of 2021 and then improve very slightly.”
“I don’t see spot availability from domestic mills at this moment. I think domestic mills are going to open January bookings soon,” a second steel distributor said. “I don’t think I will go after spot buying at the current market level. Certainly, people who don’t secure contract allocation with domestic mills do not have any other option but to buy in spot.”
Data was carried over in the producer and consumer sub-indices because of a lack of new inputs there.