USA HRC Spot Prices Pointing to Above $900/ton

Click here to sign up today for a free three-month trial to receive all the articles in the Industry News service along with our monthly Forecast Reports.

Kicking off December and coming out of the Thanksgiving holiday week, US spot prices for hot-rolled coil (HRC) remain buoyant, despite moderate activity. Market participants tell WSD that lead times are between four to eight weeks, but spot orders are mostly being taken for January—with any December tons reserved for contract customers.

“Spot prices for HRC are firm at a $900 per ton bottom, with some smaller tonnage orders ranging as high as $920,” according to a Midwest service center buyer. In fact, Nucor on Monday bumped up its HRC Consumer Spot Price (CSP) by another $5 to $920 per ton. The weekly-posted price is up 6.4% since an August low of $865/ton.

“Some steady inventory replenishment is maintaining the HRC price uptick,” added a mill sales rep, “as most customers have readily accepted recently announced higher price offers.”

Monday’s Institute for Supply Management (ISM) Manufacturing PMI® report (see more below) supported that view with data showing that its Customers’ Inventories Index remained in “too low” territory in November, with a reading of 44.7%, an increase of 0.8 percentage point compared to the reading of 43.9% in October. In fact, Primary Metals—which includes steel—led the 11 industries reporting to the ISM as having “too low” customer inventories.

Market participants on both the buy- and sell-sides are reluctant, however, to use phrases like “price rally” and “buying panic” because underlying demand is just so-so. “There are buyers who are mildly worried about getting caught short and they’re unable to find any imports. We’ve even sold several tons of HRC for January delivery at around $930-$950,” another mill sales rep said.

What’s more, the January futures contract for HRC on the CME settled Monday at $935/ton. “It will be interesting to see where December scrap settles,” a steel trader said.

“It was looking sideways, but some scrap dealers may now push for a $10-$20 increase.”

Click here to sign up today for a free three-month trial to receive all the articles in the Industry News service along with our monthly Forecast Reports.