US hot-rolled coil index climbs past $61/cwt to another record

Hot-rolled coil prices in the United States have risen yet again to an all-time high after buyers perceived that the tight availability of spot material likely will not loosen up before domestic mills begin a series of maintenance outages.

Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $61.17 per hundredweight ($1,223.40 per short ton) on Tuesday February 23, an increase of 0.64% from $60.78 per cwt on Monday February 22 and up by 1.81% from $60.08 per cwt a week earlier.

Fresh inputs were received in the distributor and the consumer sub-indices in a range of $57.00-62.50 per cwt, including confirmed buys, mill offers and general assessments of current market pricing. Non-transactional inputs were carried over in the producer sub-index due to a lack of liquidity in that index.

Heard in the market
Tuesday marks the sixth consecutive business day that Fastmarkets’ hot-rolled coil index has achieved a new record high. Sources have continued to report a shortage of spot availability, with lead times at multiple mills stretching out as far as May.

Because as many as four US mills are planning maintenance outages in June or thereabouts, according to the sources, the historic price spike for steel coil has the potential to persist longer than many buyers had previously expected. Severe winter weather and electricity disruptions have not only slowed output at various mills in the US heartland, but also may be contributing to higher ferrous scrap prices.

Import offers have not yet proved competitive enough for most US buyers to take a chance on what would be mid- to late-summer delivery, sources stated. All of these factors create a recipe for high steel prices to hang on for months, unless end-user demand slows down.

Quote of the day
“Mills will have planned outages in June, so I guess it will be a tight supply market,” a midwestern distributor said, adding that the pricing impact of those outages will depend on “how much output is really lost and how it all balances with demand.”

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