SMU Price Ranges & Indices: Bi-Polar

Furthermore, a number of buyers began telling SMU that their orders were arriving early. One large service center centrally located in the U.S. told us, “Prices appear to be flat vs. last week, and things seem to be pretty status quo. The one change I am seeing of late is, we’re having orders being produced early by multiple mills. The range is from 2 weeks to 6 weeks early. Obviously this is a concerning sign, especially since the same mills are reporting more than a standard 4 week lead-time for HR right now.”

A manufacturing company also reported to SMU this afternoon, “Scarily for me, I quoted a Chinese price (from a reputable mill) to a longtime customer and got beat – maybe by India – maybe by a less reputable mill – maybe by someone who only needs to make a low margin. It just tells me that there are very competitive markets out there and pricing is not what some of the domestic producers think that it is – the same goes for lead times.”

Another large manufacturing company told us earlier today, “We are currently spot buying at $640 from two separate mills [mill name removed].  We are getting 3 week delivery from one of them, which tells you it’s a mini-mill.  Lead times overall are getting shorter although that is being kept quiet…we needed 3,000 additional tons which we were given because of cancellations in blocked tons that didn’t come in to the mill.  This is happening every week it seems although most mills are quietly making the tons go away.  Nucor Berkley has really short lead times for hot rolled, sometimes less than one week. Foreign offers are under $610 but they aren’t booking much from what I see because the spread isn’t large enough.”

In the Midwest things are different, especially for medium and smaller sized buyers. One medium size service center coined the market as being “bi-polar” and reported that the integrated steel mills order books are quite tight at the moment, “The integrateds are tight ArcelorMittal is way behind, and USX and AK also have very limited availability. All are saying August. They claim to want $34 [$680]. AK is actually not offering any steel right now.”

We heard from a mill salesperson who when asked to confirm coated prices at less than $38.00/cwt base told us, “For 1000nt I have seen $38.50 on galvanized and customer jumped for it. Galvalume is higher. SDI not giving away nor is WN. If you are talking about the south I have no reply but in the Midwest and east coast price is not really moving.”

While another salesperson with another mill told us, “AZ [Galvalume] is under more pressure than any of our products. Some folks outright asking for $35’s. Doing better than that but $38’s are history. HDG a bit better…HRC steady. CRC OK other than cheap Chinese everywhere…Trade cases could be closing in.”

SMU heard that Essar Steel Algoma is back in the market with spot offers on hot rolled around $650 per ton fob the mill. Most buyers are telling us the Essar Algoma prices are too high (due to freight).

Out of the Upper Midwest we heard from a service center who told us, “Not sure who feeds you information.  Essar is now out until mid September and doesn’t even know what price to quote.  They are trying to fill up a barge that they are obligated to ship soon so maybe they offered someone something cheap to fill it. HR is actually firming up.  Lead times continue to expand for NLMK, Mittal, AK, Essar, Severstal…  Scrap will be going up, not down.  Highly doubt pricing will go down anytime soon.”

With that said, here is how we are seeing flat rolled steel prices and lead times this week:

Hot Rolled Coil: SMU Range is $640-$680 per ton ($32.00/cwt- $34.00/cwt) with an average of $660 per ton ($33.00/cwt) FOB mill, east of the Rockies. The lower end of our range remained unchanged compared to last week while the upper end decreased by $10 per ton. Our average is now $5 per ton lower compared to last week. SMU price momentum for hot rolled is for prices to slide over the next 30 days. We are not expecting a collapse of the market due to production issues holding supply in check but there are chinks in the armor…

Hot Rolled Lead Times: 2-6 weeks.

Cold Rolled Coil: SMU Range is $760-$810 per ton ($38.00/cwt- $40.50/cwt) with an average of $785 per ton ($39.25/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 higher compared to one week ago. SMU price momentum on cold rolled is the same as hot rolled; we expect some minor slippage over the next 30 days but production issues are allowing the mills to hold prices firmer longer than if all of the steelmaking capacity was online right now.

Cold Rolled Lead Times: 4-8 weeks.

Galvanized Coil: SMU Base Price Range is $750-$790 per ton ($37.50/cwt- $39.50/cwt) with an average of $770 per ton ($38.50/cwt) FOB mill, east of the Rockies. The lower end of our range remained unchanged compared to last week while the upper end decreased by $10 per ton. Our average is now $5 per ton lower compared to one week ago. SMU anticipates galvanized base prices will decline over the next 30 days.

Galvanized .060” G90 Benchmark: SMU Range is $810-$850 per ton with an average of $830 per ton FOB mill, east of the Rockies.

Galvanized Lead Times: 4-9 weeks.

Galvalume 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. Both the lower and upper ends of our range remained unchanged compared to last week, as did our average. Our expectation is for Galvalume prices to decline over the next 30 days.

Galvalume .0142” AZ50, Grade 80 Benchmark: SMU Range is $1041-$1091 per ton with an average of $1066 per ton FOB mill, east of the Rockies.

Galvalume Lead Times: 4-8 weeks.

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