Steel Products Prices North America

SMU Price Ranges & Indices: A Quiet Holiday Week

November 25, 2014

It has been a very quiet week due to the Thanksgiving Holiday here in the U.S. on Thursday. A number of service centers advised SMU that the number of inquiries had dramatically fallen off and there isn’t much need to buy steel at this time. The question isn’t so much where are prices this week but, rather, where will prices be headed once we move into the New Year.

The top buyer at a large manufacturing company shared his thoughts with us earlier today, “I believe that prices will continue on a slow slide until the beginning of February. Same issues as last year (over supply, under demand) at this time but for a different reason (last year people bought heavy on CRU bucket deals and this year they seem to be buying foreign). The mills are making a nice return ($100/ton+) and I see them continuing this pattern as long as the spread holds. (Essar is already talking about another furnace).”

A service center in the Upper Midwest told us, “Mills still trying to fill Dec and aggressive on larger opportunities. Upbeat about next year from a demand standpoint in North America. Imports are the largest concern. At this point we believe the pricing “band” will be fairly narrow next year.”

Most buyers are pretty optimistic about 2015. Another service center located in the Midwest told us, “Regarding tone or pace, we are actually quite surprised with how strong bookings still are considering we have hit the holiday season. Not sure beyond first quarter next year. Ag will of course be down a bit. If oil doesn’t go much lower the energy sector will be very strong. Otherwise all other industries appear to be doing well so pretty optimistic.”

SMU discussed the price spread between northern and southern mills due to the wide spread in pricing on cold rolled and some coated products in particular. Chinese cold rolled offers for late 1st/early 2nd quarter arrival were reported to be below $600 per ton ($30.00/cwt) effective (all extras included) into the West Coast and Gulf ports. The spread in coated (galvanized and Galvalume) to domestic is of particular concern to the mills located within a few hundred miles of a port. Freight issues made the foreign coated on all but ultra light gauge steels less of a factor in the north and those areas outside of the normal service area for the ports.

Here is how we see prices this week:

Hot Rolled Coil: SMU Range is $610-$650 per ton ($30.50/cwt- $32.50/cwt) with an average of $630 per ton ($31.50/cwt) FOB mill, east of the Rockies. We saw the range on hot rolled shrink compared to where we saw prices last week. The lower end of our range decreased by $10 per ton while the upper end remained the same. Our average is now $5 per ton lower than one week ago. SMU price momentum for hot rolled steel is for prices to drift and trend lower over the next 30 days.

Hot Rolled Lead Times: 2-5 weeks.

Cold Rolled Coil: SMU Range is $740-$770 per ton ($37.00/cwt- $38.50/cwt) with an average of $755 per ton ($37.75/cwt) FOB mill, east of the Rockies. Both the lower and upper ends of our range are unchanged compared to our previous price indexes, as did our average. SMU price momentum on cold rolled steel is for prices to drift and trend lower over the next 30 days.

Cold Rolled Lead Times: 5-9 weeks.

Galvanized Coil: SMU Base Price Range is $35.00/cwt-$38.00/cwt ($700-$760 per ton) with an average of $36.50/cwt ($730 per ton) FOB mill, east of the Rockies. Both the lower and upper ends of our range are unchanged compared to our previous price indexes, as did our average. SMU anticipates galvanized prices will drift and trend lower over the next 30 days.

Galvanized .060” G90 Benchmark: SMU Range is $769-$829 per ton with an average of $799 per ton FOB mill, east of the Rockies.

Galvanized Lead Times: 4-9 weeks.

Galvalume Coil: SMU Base Price Range is $36.00/cwt-$38.50/cwt ($720-$770 per ton) with an average of $37.25/cwt ($745 per ton) FOB mill, east of the Rockies. Both the lower and upper ends of our range are unchanged compared to our previous price indexes, as did our average. Our expectation is for Galvalume prices to drift and trend lower over the next 30 days.

Galvalume .0142” AZ50, Grade 80 Benchmark: SMU Range is $1011-$1061 per ton with an average of $1036 per ton FOB mill, east of the Rockies.

Galvalume Lead Times: 5-9 weeks.

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