SMU Price Ranges & Indices: Bouncing Around the Peak or Preparing for Another Run?

The net result is we are seeing prices bouncing over the past few weeks. The question many are asking themselves is are we bouncing at the peak of the market and the only direction is down or, are we gearing up for another spike higher?

Steel analysts appear united in the thought process that a wave of imports is about to hit U.S. shores and prices will sink with the tide sometime during the 1st Quarter 2014. Here is what Bank of America Merrill Lynch Research metals and mining analyst Timna Tanners told her clients after the MSCI data was reported on Monday:

“Mill utilization has been fairly flat in 2013, but output and Q4 service center shipments can improve y/y after a particularly soft end to 2012. The current $100/t+ delivered U.S. price premium vs. RoW has already begun to attract more import offers and our channel checks suggest a sharp uptick into Q1E, both from compelling prices and also as an alternative to more rigid and shorter-term contract price terms from domestic mills. Importers tell us they have become much busier in the past month. This already seems to have tempered mill pricing, as a much-awaited further price hike has not materialized from larger mills. On the demand side, industry sentiment seems better into 2014E, especially regarding non-residential construction, and, incrementally, in the robust domestic auto industry….”

Many (not all) within the steel industry are also keeping a wary eye on imports and the mills’ order books and are skeptical whether numbers can move much higher from here.  However, there is a group of steel people who believe that with higher scrap costs and the hope that foreign steel prices are moving higher, there is still room for prices to run.

Here is how we are seeing prices this week:

Hot Rolled Coil: SMU Range is $650-$690 per ton ($32.50/cwt- $34.50/cwt) with an average of $670 per ton ($33.50/cwt) fob mill, east of the Rockies. The lower end of our range decreased 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 rise over the next 30 days.

Hot Rolled Lead Times: 3-9 weeks.

Cold Rolled Coil: SMU Range is $750-$800 per ton ($37.50/cwt- $40.00/cwt) with an average of $775 per ton ($38.75/cwt) fob mill, east of the Rockies. The lower end of our range decreased 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 cold rolled is for prices to rise over the next 30 days.

Cold Rolled Lead Times: 5-8 weeks.

Galvanized Coil: SMU Base Price Range is $750-$800 per ton ($37.50/cwt- $40.00/cwt) with an average of $775 per ton ($38.75/cwt) fob mill, east of the Rockies. The lower end of our range decreased by $20 per ton compared to last week while the upper end increased by $10 per ton. Our average is now $5 per ton lower compared to last week. The trend for galvanized is for prices to rise over the next 30 days.

Galvanized .060” G90 Benchmark: SMU Range is $810-$860 per ton with an average of $835 per ton.

Galvanized Lead Times: 5-10 weeks.

Galvalume Coil: SMU Base Price Range is $770-$800 per ton ($38.50/cwt- $40.00/cwt) with an average of $785 per ton ($39.25/cwt) fob mill, east of the Rockies. Both the lower and upper ends 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 rise over the next 30 days.

Galvalume .0142” AZ50, Grade 80 Benchmark: SMU Range is $1061-$1091 per ton with an average of $1076 per ton.

Galvalume Lead Times: 6-9 weeks.

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