Steel Products Prices North America

SMU Price Ranges & Indices: Getting Closer to Breaking $600 Hot Rolled

December 9, 2014

Flat rolled steel prices continued to erode this week as buyers reported an expansion of discounted offers coupled with short mill lead times. Many steel buyers are telling Steel Market Update that their inventories are relatively high, there are new foreign offers out there at “good” prices and that they can sit back and wait to buy. This is pressuring those mills who feel they need to fill their order books.

Even US Steel admitted in an internal memo sent to their customers, that market pricing had eroded to “unhealthy and unsustainable levels.”

Steel buyers on the other hand are not convinced that prices will not continue to erode further. One large service center general manager shared his thoughts with me this afternoon, “I have contract index-type deals done for 2015, and doing some spot deals. Doing some foreign in Q1 for CR (Chinese) at $29 loaded truck Houston. For the most part, I’m not in any big need for Spot at this time. There is some increased fill-in activity with service centers and traders with Depot tons at around $60-70/ton below CRU. They see the writing on the wall, and realize that any sale today is better than the future, and desire to move the metal. I’m starting to think that we will see more months in 2015 with HR under $600/ton, than we do above $600/ton…”

A large manufacturing company told us, “We are holding off as this thing continues to slide. We will look at a possible buy after the first of the year.”

One service center traded text messages with us on Monday. The president of the company was wondering if the base prices were really as low as what some of the indexes were referencing ($600 or below) when in actuality the base prices were higher ($610 to $630) but there are adjustments being made for extras or freight that are entering into the final reference numbers. We will talk about this subject more in the coming days as we do believe it is important to understand.

Until then, here is how we see prices this week:

Hot Rolled Coil: SMU Range is $600-$630 per ton ($30.00/cwt- $31.50/cwt) with an average of $615 per ton ($30.75/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 less 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 $720-$770 per ton ($36.00/cwt- $38.50/cwt) with an average of $745 per ton ($37.25/cwt) FOB mill, east of the Rockies. The lower end of our range declined by $10 per ton compared to last week while the upper end was unchanged. Our average is now $5 per ton lower than last week. 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-$37.50/cwt ($700-$750 per ton) with an average of $36.25/cwt ($725 per ton) 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 down $5 over last week. SMU anticipates galvanized prices will drift and trend lower over the next 30 days.

Galvanized .060” G90 Benchmark: SMU Range is $769-$819 per ton with an average of $794 per ton FOB mill, east of the Rockies.

Galvanized Lead Times: 4-9 weeks.

Galvalume Coil: SMU Base Price Range is $35.50/cwt-$38.50/cwt ($710-$770 per ton) with an average of $37.00/cwt ($740 per ton) FOB mill, east of the Rockies. The lower end of our range declined by $10 per ton compared to last week while the upper end was unchanged. Our average is now $5 per ton lower than last week. 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 $1001-$1061 per ton with an average of $1031 per ton FOB mill, east of the Rockies.

Galvalume Lead Times: 5-9 weeks.

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