Steel Products
SMU Fair Value Model Has HRC Spot Pricing Below Fair Value for 3rd Week
Written by John Packard
February 4, 2013
This week, the SMU Fair Value HRC (hot rolled coil) Model has spot HRC pricing below Fair Value for the third week in a row after nine consecutive weeks of higher HRC prices. This is due to the SMU average spot HRC index remaining the same at $610 per ton and scrap inputs remaining the same over last week’s figures. The Fair Value model now shows HRC prices $13 below the estimated Fair Value price.
Scrap prices will be negotiated for the month of February in the coming days. At this moment the expectation is for price movements to potentially vary by product and by region. Our sources are reporting the best case scenario for the Midwest to be a flat or sideways move while there are those who believe prices could drop as much as $20 per gross ton. A sideways move on scrap inputs would keep our model at $13 below the estimated Fair Value price (assuming no change in HRC price assessment). If scrap drops as much as $20 that would have a positive impact on our Fair Value model and put HRC prices above Fair Value (assuming no change in the HRC price).
As a reminder, the Fair Value HRC Model below came from the SMU acquisition of Steel Reality. The graph below demonstrates the relationship between scraps inputs creating an estimated “Fair Value” for HRC versus the actual spot price.
John Packard
Read more from John PackardLatest in Steel Products
Rig count update: US activity stable, Canada slips
The number of oil and gas rigs operating in the US remained unchanged this week for the second consecutive week, while Canadian activity declined, according to the latest data released from Baker Hughes.
SMU market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Past survey results are also available under that selection. If you need help accessing the survey results, or if […]
Domestic, offshore CRC prices steady
The price spread between US-produced cold-rolled (CR) coil and offshore products on a landed basis was unchanged in the week ended Dec. 20.
SMU Survey: Mill lead times contract slightly, remain short
Steel mill production times have seen very little change since September, according to buyers participating in our latest market survey.
Worthington Enterprises’ earnings dip in fiscal Q2’25
Worthington Enterprises' profits edged down in its fiscal second quarter of 205 vs. a year earlier. The company said a slump in sales in the quarter was due largely to the "deconsolidation" of the Sustainable Energy Solutions segment in the fourth quarter of fiscal 2024.