US hot-rolled coil index holds above $40/cwt; market eyes domestic scrap trade

Hot-rolled coil prices in the United States have held above $40 per hundredweight ($800 per short ton) while the availability of spot tons remains limited, according to sources.

Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $40.50 per cwt ($810 per ton) on Wednesday December 2, little-changed from $40.44 per cwt on Tuesday December 1 and an increase of 3.85% from $39 per cwt one week earlier.

Inputs were received in a range of $38-42.50 per cwt. This range represents confirmed mill offers and general assessments of current spot market pricing levels.

Heard in the market
Market participants reported that supply of hot-rolled coil continues to be tight, with limited spot availability at domestic mills, and that higher domestic ferrous scrap prices this month could support the hot band price uptrend as well.

Some sources said that January 2021 order books have closed at certain mills and that they will wait to order until February 2021 order books open up.

As a result, market participants expect US mills to remain in the drivers’ seat on pricing for the rest of December.

Quote of the day
“It’s a timing game now, it’s almost like milk with an expiration date of the week before Christmas. The opportunity to command a crazy price is quickly coming to a close,” a steel distributor said. “After the week before Christmas, everything will taper off until January, and I think demand will moderate after that. Sellers need to sell their material before the expiration date.”

Index calculation
Inputs at the top end of the range were discarded because sources indicated that price level was not reflective of current spot buying prices.

Elizabeth Ramanand

elizabeth.ramanand@fastmarkets.com

Published

Elizabeth Ramanand

December 02, 2020

22:51 GMT

New York