Steel Products Prices North America

SMU Price Ranges & Indices: Tide Feels Like it is Changing...

May 27, 2014

The break for the Memorial Day Holiday here in the United States took some of the pressure off both buyers and sellers of steel as both sides regroup and begin to look at July and beyond flat rolled steel pricing.

One steel mill executive told us that they were seeing downward pressure on their mill regarding future spot pricing on flat rolled, “Same for now, but feeling pressure to move down. July ‘might’ be a rollover, but it feels like the bad guys will make inroads [foreign steel]. It seems like customers are negotiating with more confidence. They may not have all their import tonnage on hand due to late shipments or port terminal congestion, and they have short term holes to plug, but looking two months out they are more confident that they should get a price break.”

The same mill told us that domestic mill lead times have “hit the wall” and that their conversion mill was being offered more substrate than usual.

Most buyers who hadn’t taken an extended Holiday break reported no change from this past week. However, we did hear from a number of steel buyers who have begun to make “lowball offers” to the mills in the hopes that they can break through current price levels.

From the east coast we heard that hot rolled prices were moving down which, according to the service center buyer, “…makes no sense since there is no foreign HR coming to the eastern seaboard.” This buyer went on to say that the spread between foreign and domestic on cold rolled was “totally out of line” with the difference being “$90-$120/ton” and that did not include the freight factor which adds another $15 to $20 per ton in favor of the foreign suppliers. “The domestic mills are holding their prices. Foreign pricing is considerably less and we are being forced into looking at the foreign product. I believe there is a much greater percentage of coated coming. Look for those numbers to jump in the late third quarter, early fourth quarter.”

Another east coast buyer admitted to SMU in a phone conversation this afternoon, “I have imported more this year than during my entire 9 year career.” He pointed to the spread as being $80-$120 per ton and he told us that the domestic mills lost “a big chunk” of his business to foreign steel.

From the central part of the United States we heard this from a major service center, “There is a notable change in behavior from the mills. I’m getting some calls from non-supplying mills pretty far away, looking to “check in on things”. Some were the first time they’ve called this year. Current mill suppliers are much more willing to talk on price. I don’t hear anxiety yet, but the commercial folks seem to sense we could see more than a mild correction. For HR, it appears that $33.00 is quickly becoming a price that will work for 3-500 tons. Given the outlook that scrap prices could drop with some significance in June/July, there is a growing belief that flat-rolled is headed the same way.”

Steel Market Update continues to have our Price Momentum Indicator at Neutral indicating change is in the air but prices have not yet begun to deteriorate across all geographical regions and products.

Here is how we are seeing prices this week:

Hot Rolled Coil: SMU Range is $660-$690 per ton ($33.00/cwt- $34.50/cwt) with an average of $675 per ton ($33.75/cwt) FOB mill, east of the Rockies. Both the lower and upper ends of our range are unchanged compared to last week. Our average is the same compared to last week. Our expectation is for hot rolled pricing to remain neutral over the next 30 days.

Hot Rolled Lead Times: 3-6 weeks.

Cold Rolled Coil: SMU Range is $790-$810 per ton ($39.50/cwt- $40.50/cwt) with an average of $800 per ton ($40.00/cwt) FOB mill, east of the Rockies. Both the lower and upper ends of our range are unchanged compared to last week. Our average is the same compared to last week. SMU anticipates cold rolled prices will remain neutral over the next 30 days.

Cold Rolled Lead Times: 6-8 weeks.

Galvanized Coil: SMU Base Price Range is $780-$820 per ton ($39.00/cwt- $41.00/cwt) with an average of $800 per ton ($40.00/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 remained the same. Our average is now $10 per ton lower compared to one week ago. SMU anticipates galvanized base prices will remain neutral over the next 30 days.

Galvanized .060” G90 Benchmark: SMU Range is $840-$880 per ton with an average of $860 per ton FOB mill, east of the Rockies.

Galvanized Lead Times: 5-9 weeks.

Galvalume Coil: SMU Base Price Range is $780-$820 per ton ($39.00/cwt- $41.00/cwt) with an average of $800 per ton ($40.00/cwt) FOB mill, east of the Rockies. Both the lower and upper ends of our range are unchanged compared to last week. Our average is the same compared to last week. Our expectation is for Galvalume prices to remain neutral over the next 30 days.

Galvalume .0142” AZ50, Grade 80 Benchmark: SMU Range is $1071-$1111 per ton with an average of $1091 per ton FOB mill, east of the Rockies.

Galvalume Lead Times: 5-9 weeks.

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