SMU Data and Models

SMU Price Ranges & Indices: Strength in Stability

September 24, 2013

We are finding a concerted effort on behalf of the domestic steel mills to hold the line on spot pricing from last week to this week. Stability in pricing appears, for the moment, to be the new normal and some of the service centers are questioning if the next price move might actually be for prices to move slightly higher from here.

The buyers seem to be relatively content to buy spot at current market pricing. Inventories continue to be lower than one year ago. Steel Market Update (SMU) calculated distributors’ inventories to be in deficit to the tune of 463,000 tons.

We have more information about spot pricing and positions being taken by the domestic steel mills and service centers elsewhere in this issue.

Steel Market Update continues to display our SMU Price Momentum Indicator at Neutral. We do not anticipate much movement – higher or lower – over the next 30 days. However, we do want to point out we are not completely sold that the next price move will be lower. There are a number of factors hitting supply which continue to impact the market and are holding prices steady. Lead times continue to be reasonable in length for this time of year and if the mills can hold the line over the next 30-45 days they could well get to the point when we will see a “normal” first quarter 2014 growth in inventories.

Here is how we are seeing prices this week:

Hot Rolled Coil: SMU Range is $630-$650 per ton ($31.50/cwt- $32.50/cwt) with an average of $640 per ton ($32.00/cwt) fob mill, east of the Rockies. The lower end of our range increased by $10 per ton compared to last week while the upper end remained the same. Our average is now $5 per ton lower compared to last week. The trend for hot rolled is for prices to remain relatively stable over the next 30 days.

Hot Rolled Lead Times: 3-5 weeks.

Cold Rolled Coil: SMU Range is $730-$760 per ton ($36.50/cwt- $38.00/cwt) with an average of $745 per ton ($37.25/cwt) fob mill, east of the Rockies. Both the lower and upper end of our range increased by $10 per ton compared to prices one week ago. Our average is now $10 higher compared to last week. The trend for cold rolled is for prices to remain relatively stable over the next 30 days.

Cold Rolled Lead Times: 5-8 weeks.

Galvanized Coil: SMU Base Price Range is $730-$750 per ton ($36.50/cwt- $37.50/cwt) with an average of $740 per ton ($37.00/cwt) fob mill, east of the Rockies. Both the lower and upper end of our range remained the same compared to last week. Our average is unchanged compared to last week. The trend for galvanized is for prices to remain relatively stable over the next 30 days.

Galvanized .060” G90 Benchmark: SMU Range is $790-$810 per ton with an average of $800 per ton.

Galvanized Lead Times: 3-8 weeks.

Galvalume Coil: SMU Base Price Range is $740-$780 per ton ($37.00/cwt- $39.00/cwt) with an average of $760 per ton ($38.00/cwt) fob mill, east of the Rockies. Both the lower and upper end of our range remained the same compared to last week. Our average is unchanged compared to last week. The trend for Galvalume is for prices to remain relatively stable over the next 30 days.

Galvalume .0142” AZ50, Grade 80 Benchmark: SMU Range is $1031-$1071 per ton with an average of $1051 per ton.

Galvalume Lead Times: 5-8 weeks.