SMU Price Ranges & Indices: Floating on Top of the World

Another steel executive told SMU that their suppliers were getting caught up. But, he could only report that the southern mills are “getting more anxious” but anxiety was not necessarily translating into lower pricing. For that matter the anxiety may be a result of a particular mill’s proximity to one of the major ports where foreign steel is playing a major role.

A steel buyer who purchases material from the former Severstal Columbus plant noted that when SDI put out the new HRC lead times for Columbus they were noticeably shorter at 2 weeks than the 6-8 weeks reported by Severstal just a week or two earlier. He went on to tell us, “There’s been a more noticeable “stall” in orders for the mills, and lead-times are slowing. There is definitely a different feel to the market now where buyers have higher inventory levels and thus less fear about any sudden upward changes. The air is slowing coming out of the balloon for prices, evident both on the ground and in the HR Futures as well. HR price averages for medium volume is under $33.00, and under $32 for larger volumes, though buyers remain hesitant to put larger blocks of tons on the table given the uncertainty.”

One of our contacts had attended a steel-related luncheon this past week in New York City. SMU was told that he left the meeting a “bit more pessimistic” than he had been. The main reason being many of the steel companies located on the East Coast were reporting that the domestic buyers had written off their domestic steel mill suppliers and were turning to foreign steel in ever greater numbers. Granted, the East Coast is not a huge steel market when compared to the Midwest but it all adds up in the end.

He went on to tell SMU that he didn’t think the mills can sustain these spot numbers because mills are catching up and the balance of demand versus supply will be an issue – especially when taking foreign steel arrivals into account.

Another buyer reported that they had a visit from AK Steel within the past few days. The mill is full (Ashland blast furnace is down for a reline of the hearth) and their spot coated number began with a “4” ($40.00/cwt-$41.00/cwt). At that number he was not a buyer.

SMU believes the next 30 days will be key as lead times on coated move into the month of December and the traditional holiday slow-down in business comes into play. Although we should not forget that the last couple of years have not seen the normal slicing of prices that we usually see to fill late November and December order books.

Here is how we see prices 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. 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 has us calling for stability over the 30 days. However, consolidation and the potential of trade cases could alter market psychology. We will need to watch the market closely.

Hot Rolled Lead Times: 2-5 weeks.

Cold Rolled Coil: SMU Range is $760-$800 per ton ($38.00/cwt- $40.00/cwt) with an average of $780 per ton ($39.00/cwt) FOB mill, east of the Rockies. Both the lower and upper ends of our range remained the same compared to one week ago. Our average is unchanged compared to last week. SMU price momentum for cold rolled steel has us calling for stability over the 30 days. However, consolidation and the potential of trade cases could alter market psychology. We will need to watch the market closely.

Cold Rolled Lead Times: 5-9 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 $10 per ton compared to last week while the upper end remained the same. Our average is $5 lower compared to one week ago.  SMU price momentum for galvanized steel has us calling for stability over the 30 days. However, consolidation and the potential of trade cases could alter market psychology. We will need to watch the market closely.

Galvanized .060” G90 Benchmark: SMU Range is $819-$869 per ton with an average of $844 per ton FOB mill, east of the Rockies. SMU Note: We are now using $3.45/cwt or $69 per ton extra in order to calculate the .060 G90 pricing.

Galvanized Lead Times: 4-9 weeks.

Galvalume Coil: SMU Base Price 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. 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 Galvalume steel has us calling for stability over the 30 days. However, the potential of trade cases could alter market psychology. We will need to watch the market closely.

Galvalume .0142” AZ50, Grade 80 Benchmark: SMU Range is $1051-$1101 per ton with an average of $1076 per ton FOB mill, east of the Rockies.

Galvalume Lead Times: 5-9 weeks.

SMU Note: You can view the interactive graphic below when you are logged into the website and reading the newsletter online. If you have not logged into the website in the past and your username and password, contact us at: info@SteelMarketUpdate.com or by calling 800-432-3475. If you need help navigating the website we would also be happy to assist you.

{amchart id=”110″ Weekly Pricing Article Graph- Use for NEWSLETTER Prices}