Economy

SMU Has HRC Spot Pricing Below Fair Value for Sixth Week

Written by Brett Linton

March 25, 2013

This week, the SMU Fair Value HRC (hot rolled coil) Model has spot HRC pricing below Fair Value for the sixth consecutive week after briefly rising above the Fair Value price in the week of February 8th. This is due to the SMU average spot HRC index decreasing $5 per ton last week to $610 per ton and scrap inputs remaining the same for the month of March. The Fair Value model now shows HRC prices $43 below the estimated Fair Value 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.

 

Brett Linton

Brett Linton is a senior analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at brett@steelmarketupdate.com or 724-314-0179.

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