Volatility in steel prices likely to continue

What strikes me if you look at U.S. sheet prices compared to those just about anywhere else in the world is how volatile the market here is. We saw hot-rolled coil (HRC) prices increase 62% throughout Q4 2023. They then almost immediately reversed course and started falling in the new year.

Prices in other regions followed a similar pattern. But the magnitude of the volatility is unique to the U.S.

How do steel consumers in the U.S. manage a business with a raw material price that whipsaws even in times of roughly stable demand? Yes, steel is a cyclical business, and it always will be. But the volatility of the last few years in sheet is something new.

It’s almost like trying to build a stable, profitable business around Bitcoin – the posterchild for volatility. I don’t know whether anyone has charted Bitcoin volatility compared to HRC volatility, but I suspect U.S. sheet prices and crypto might have more in common than we think.