Hot-rolled coil prices in the United States have hit a new high, with most market players bracing for a series of planned plant shutdowns.
Fastmarkets’ daily hot-rolled steel coil index, fob mill US, averaged $ 96.14 per cwt ($ 1,922.80 per short ton) for the week ended Friday, August 20 , up 0.93% from $ 95.25 per cwt the previous week and more than four times the average of $ 23.78 per cwt recorded during the same week in 2020.
This is the highest weekly average recorded by Fastmarkets since 1960, surpassing the previous week’s record and marking the 30th consecutive week of records.
Heard in the market
The HRC index is expected to test new highs in the coming weeks due to a series of planned maintenance shutdowns at U.S. factories and customers receiving minimum contract allocations, sources said. The availability of steel has increased slightly in recent weeks, but this could be short-lived due to the closures, sources say. It was reported that delivery times are typically six to ten weeks for hot rolling.
Demand also remains robust in the construction and manufacturing sectors, with the exception of autos, according to some sources. Buyers said that the slowdown in auto production due to the shortage of semiconductor chips had helped to limit the price increase to some extent. Service centers that deal with the auto industry stock up on steel, which is rare in other industries, a Midwestern distributor said.
The hot-rolled coil futures curve in the United States, where contracts traded below $ 90 per hundredweight in the fourth quarter, is fueling additional caution among hot strip buyers.
The price differential between domestic hot-rolled coils and materials from foreign producers has increased the attractiveness of imports, sources said. Higher freight costs, port congestion and late deliveries aren’t enough to deter buyers, some said.
Quote of the week
“We’re holding on,” said one Great Lakes distributor. “We have our allocation and were able to achieve enough room to maintain our position. The big problem has been the more esoteric objects, which are almost impossible to find. The shortage of auto chips helped us as we wouldn’t have been able to get some of these items if there hadn’t been a shortage.
Dom Yanchunas, Rijuta Dey Bera and Mark Shenk, all in New York, contributed to this report.