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U.S. hot-rolled coil prices are expected to continue their rapid rise after more than doubling in the past three months. This was reported by market sources on December 11, according to spglobal.com.

Further rise in U.S. hot-rolled coil prices expected
Further rise in U.S. hot-rolled coil prices expected

Steelmaker had amount of tons limited

The daily Platts TSI US HRC index was unchanged at $900/pc, but sporadic spot offers were heard at higher levels.

A service center source told spglobal that an integrated mill had opened its February order book at $950. The steelmaker had only one mill available and was limiting the amount of tons available, the source said.

Mill source: “Hot-rolled coil prices above $940”

Prices in the Chicago market were above $940, according to a mill source. “The market dynamics are strange this cycle,” with strong demand and the current supply disruptions, the source added. He noted that there is the potential for more supply issues. Especially if the weather gets colder, which could lead to unplanned outages.

“My sense is that this cycle has a longer life than we thought. And the decline shouldn’t be as severe when real demand returns in the second and third quarters,” the source added.

Steel Mills would push for the higher price level

The potential for hot-rolled coil at $1,000 appeared to be growing as purchasers assumed mills would push for the higher price level as spot availability remained constrained.

“I think we’ll be at the $1,000 (hot-rolled coil – HRC) threshold by the middle of the first quarter, and that could continue for a while. But at some point, someone is going to blink,” said a Midwest processor. He pointed to the complete disruption of supply in the region due to capacity cuts, which is causing purchasers to try to order from mills farther away with high freight costs.

Canadian mill had already broken the $1,000 barrier

One Canadian mill had already broken the $1,000 barrier on hot-rolled coil (HRC) quotes. One end user noted that the steelmaker said it would sell April production for $1,010. “That number is unbelievable. I thought they made a mistake at first,” the end user said.

However, the offer was for production five months in advance and was not within Platts’ considered delivery window. The source said he has been buying steel globally for more than two decades and this remains the roughest market he has ever experienced for steel purchasers.

Source: spglobal.com


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