SMU Price Ranges & Indices: A Waiting Game

A large service center general manager told us late today, “HR sheet spot pricing offers seem pretty stable at CRU +/- $20. Lead-times are all over the place. USS Granite City is at 2 weeks, which is troubling, while Severstal Columbus is October. Hard to get an accurate read on this market at the moment. Mills aren’t showing their hands as much as usual, and still focusing more on price. I don’t think buyers are dangling large volumes, in fear market may get looser/lower later, so status quo persists.”

SMU produced our forecast for service center inventories for our Premium level members earlier today in our Apparent Excess/Deficit report. We are projecting that inventories will move into excess by the end of this month and than will build later this year. One of the key factors is the flood of flat rolled imports which began hitting the docks in full force in May and have continued since.

Steel Market Update continues to have our Price Momentum Indicator pointing to Neutral as prices trend sideways and without clear direction.

With that being said here is how we see 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 remained the same compared to last week. Our average is unchanged compared to one week ago. SMU price momentum for hot rolled steel is for prices to remain neutral as we wait for the one item which will move the market in one direction or the other over the next 30 days.

Hot Rolled Lead Times: 2-5 weeks.

Cold Rolled Coil: SMU Range is $780-$810 per ton ($39.00/cwt- $40.50/cwt) with an average of $795 per ton ($39.75/cwt) FOB mill, east of the Rockies. The lower end of our range increased by $20 per ton compared to one week ago while the upper end remained the same. Our average is now $10 per ton higher compared to one week ago. SMU price momentum on cold rolled steel is for prices to remain neutral and trend sideways over the next 30 days as the market waits for something which will push prices (hard) in one direction or the other.

Cold Rolled Lead Times: 5-9 weeks.

Galvanized Coil: SMU Base Price Range is $770-$810 per ton ($38.50/cwt- $40.50/cwt) with an average of $790 per ton ($39.50/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 one week ago. SMU anticipates galvanized base prices will remain neutral and trend sideways over the next 30 days as the market waits for something to push it in one direction or another.

Galvanized .060” G90 Benchmark: SMU Range is $830-$870 per ton with an average of $850 per ton FOB mill, east of the Rockies.

Galvanized Lead Times: 4-9 weeks.

Galvalume Coil: SMU Base Price Range is $770-$820 per ton ($38.50/cwt- $41.00/cwt) with an average of $795 per ton ($39.75/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 one week ago. Our expectation is for Galvalume prices to remain neutral over the next 30 days and trend sideways. However, unlike other products, Galvalume pricing is being influenced by the size, scope and pricing of foreign arrivals. SMU has heard that at least one domestic steel mill is beginning to get serious about being competitive in the Galvalume markets. We will watch this product carefully as it may be the first to break ranks from the stability shown in the other flat rolled steel products.

Galvalume .0142” AZ50, Grade 80 Benchmark: SMU Range is $1061-$1111 per ton with an average of $1086 per ton FOB mill, east of the Rockies.

Galvalume Lead Times: 5-9 weeks.

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