Fastmarkets daily steel hot-rolled coil index, fob mill US
was calculated at $34.82 per cwt ($696.40 per short ton) on Thursday November 5, up by 0.9% from $34.52 per cwt on Wednesday and by 1.9% from $34.16 per cwt on October 29.
US HRC prices now stand at their highest point since reaching $34.88 per cwt on March 18, 2019.
Heard in the market
Inputs were received in a narrow band of $33.50-35 per cwt and across all three sub-indices: Producer, distributor and consumer.
While some mills still have availability in December, others have closed their order books for 2020 - some without taking spot orders in December - and have yet to open them for January, market participants said.
And there are rumors that mills could open January order books with HRC prices up to $37-39 per cwt, sources said.
Higher prices would be supported by strong automotive demand - evidenced by strong earnings at General Motors Co
, extremely limited spot supplies and lean inventories across the supply chain. Also providing support are lingering furnace problems at some integrated mills and longer than expected maintenance outages at electric-arc furnace (EAF) producers - issues that continue to squeeze supplies, some sources said.
But other sources said that prices could be nearing a plateau despite those factors. One potential catalyst for a slowing of the three-month bull market for steel is import competition, if mills raise prices too aggressively. And imports could become an even bigger issue if President Donald Trump wins a second term or Joe Biden wins and eases Section 232 trade barriers, sources said.
Also, increased domestic supplies - resulting from new capacity coming online, upgrades to existing facilities and idled capacity restarting - could also pressure prices, they said.
And while some said a shift in consumer spending toward steel-intensive goods - including cars and appliances - will continue to drive demand, others cautioned that activity could slip if a gridlocked US government fails to deliver another round of stimulus and if demand from the oil and gas sector remains weak.
Quote of the day
“We see a lot of people scrambling for steel,” one mill source said. “If they don’t take it [at the initially offered price], they come back a few days later and ask if it’s still available.”
Dom Yanchunas in New York contributed to this article.