Spot market prices for US domestic hot rolled coil (HRC) have spiked since our last report a week ago, with prices having trended up approximately $3.50 cwt. ($77/mt or $70/nt) in the past seven days. Today, the most commonly reported ex-Midwest mill transaction range for US HRC is being heard in the approximate range of $29-$30 cwt. ($639-$661/mt or $580-$600/nt).
This is a stark contrast from January 1, 2016, when SteelOrbis reported US HRC prices were trending in the approximate range of $18.50-$19.00 cwt. ($407-$419/mt or $370-$380/nt), ex-Midwest mill.
“A lot of us are wondering if it’s too much too quick, and whether the price increases are sustainable,” one Midwest-based source said. “The run-up on pricing has been crazy, but it doesn’t seem to matter which direction the pendulum is swinging because it always seems to swing a little bit too far.”
“I think probably 20 percent of the increases can be attributed to the fact that when prices fell, they fell way too far,” another source added. “HRC was completely undervalued. When prices started going up people were reluctant to buy out of fear that things could fall again pretty quickly. Everyone collectively ran down their inventories and what we’re seeing now is a full-blown supply issue.”