SMU Price Ranges & Indices: HRC Drops Again & Momentum Change

It has been our position that we allow for the domestic steel mills time to adjust to changes in the marketplace which could have an impact on spot flat rolled steel prices. Whenever the steel industry goes out and attempts to collect a price increase we will adjust our Momentum Indicator to Neutral and allow the mills to make their case to their customers. Over the past month we have been watching two areas which we felt could have an impact on pricing: consolidation of Severstal Dearborn and Columbus and the threat of flat rolled dumping suits (cold rolled and coated).

It is our current opinion that consolidation will not result in Steel Dynamics and AK Steel attempting to push prices higher. At the moment it appears SDI is allowing Columbus to remain “status quo” and allow their people to operate as they have been. AK Steel appears to be still digesting their purchase and it is our opinion it will take time to fill the mill with the proper mix of orders. AK also has the issue of the reline of the Ashland blast furnace to deal with over the next two to three months.

The second issue is the threat of dumping suits. It is our “opinion” that the threat is abating (this is by no means a guarantee that suits will not be filed in the future. We believe suits will depend on future imports and how those imports affect mill profitability and their ability to fill their order books). We do not feel the domestic steel industry is united in the filing of trade cases on cold rolled, galvanized and Galvalume. We do not have any inside information one way or the other but we feel that the mills will be profitable in 3Q and probably 4Q and the timing may not be right. Also, the mills have been getting some of what they want without filing. A number of trading companies are shying away from Chinese flat rolled out of respect for the possibility of dumping suits and how that could negatively impact their business.

We want to reiterate that this is our “opinion” and we welcome the opinions of others. You can send them to: John@SteelMarketUpdate.com

Here is how we see prices this week:

Hot Rolled Coil: SMU Range is $630-$670 per ton ($31.50/cwt- $33.50/cwt) with an average of $650 per ton ($32.50/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 lower compared to one week ago. SMU price momentum for hot rolled steel is for prices to remain neutral over the next 30 days.

Hot Rolled Lead Times: 2-5 weeks.

Cold Rolled Coil: SMU 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 increased by $10 per ton compared to last week while the upper end remained the same. Our average is now $5 higher compared to one week ago. SMU price momentum on cold rolled steel is for prices to remain neutral over the next 30 days.

Cold Rolled Lead Times: 5-9 weeks.

Galvanized Coil: SMU Base Price Range is $740-$790 per ton ($37.00/cwt- $39.50/cwt) with an average of $765 per ton ($38.25/cwt) FOB mill, east of the Rockies. Both the upper and lower ends of our range decreased by $10 per ton compared to last week. Our average is $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 $809-$859 per ton with an average of $834 per ton FOB mill, east of the Rockies.

Galvanized Lead Times: 4-9 weeks.

Galvalume Coil: SMU Base Price Range is $750-$810 per ton ($37.50/cwt- $40.50/cwt) with an average of $780 per ton ($39.00/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 lower compared to one week ago. Our expectation is for Galvalume prices to remain neutral over the next 30 days.

Galvalume .0142” AZ50, Grade 80 Benchmark: SMU Range is $1041-$1101 per ton with an average of $1071 per ton FOB mill, east of the Rockies.

Galvalume Lead Times: 5-9 weeks.

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