Steel Products Prices North America

SMU Price Ranges & Indices: Still Searching For Equilibrium

May 20, 2015

This week we are seeing a “settling” of prices as buyers work with their suppliers. We are seeing a mixed market which was described to us by an executive with a large service center when he told us, “… it’s quite perplexing. The domestics certainly are seeing increased activity, slightly longer lead-times, and slightly higher spot prices, as evidenced by the various index measures. At the same time, we’re seeing import prices still at attractive and aggressive levels.”

While another executive with plants in both the Upper Midwest and the South told us, “There is precious little $540 out there John. I think the min is more like $560 with a range of $560-600. Hearing more about potential labor issues now. Are you? This may heat things up a touch in the coming weeks.”

We heard from one conversion mill today that their coating lead times were already going into August…

There are differences from mill to mill and we need to work through those issues before the market can move higher from here. As our one service center executive pointed out above, import prices continue to be an issue and with domestic mills trying to move higher there has to be a recognition that the numbers can only move so far so fast.

Steel buyers are becoming concerned and have to be aware of some of the issues which could impact lead times, availability and pricing in a major way. There are two trains on the tracks and we will soon realize that they could be heading toward our buyers: dumping suits and union contracts. Stay tuned as it will most likely be a very interesting summer.

In the meantime, here is how we see spot flat rolled prices this week (all prices shown are in net tons which are equal to 2,000 pounds):

Hot Rolled Coil: SMU Range is $430-$480 per net ton ($21.50/cwt- $24.00/cwt) with an average of $455 per ton ($22.75/cwt) FOB mill, east of the Rockies. The lower end of our range decreased $10 per ton compared to last week, as did the upper end of our range. Our average is now $10 per ton lower compared to one week ago. However, one should not read too much into the adjustment of the numbers as the industry searches for what is realistic in this market. SMU price momentum for hot rolled steel is for prices to trend slowly higher over the next 30 to 60 days.

Hot Rolled Lead Times: 2-5 weeks.

Cold Rolled Coil: SMU Range is $540-$600 per net ton ($27.00/cwt- $30.00/cwt) with an average of $570 per ton ($28.50/cwt) FOB mill, east of the Rockies. The lower end of our range decreased $20 per ton compared to one week ago while the upper end decreased $5 per ton. Our average is down $10 per ton compared to last week. As with hot rolled above, one should not read too much into the adjustment in cold rolled prices as the market searches for stability. This is especially true for cold rolled where there is a wide variance between domestic and foreign offers (China and elsewhere). We continue to believe that price momentum on cold rolled steel is for prices to slowly move higher over the next 30 to 60 days.

Cold Rolled Lead Times: 3-7 weeks.

Galvanized Coil: SMU Base Price Range is $27.50/cwt-$30.00/cwt ($550-$600 per net ton) with an average of $28.75/cwt ($575 per ton) FOB mill, east of the Rockies. The lower end of our range remained the same compared to last week as is the upper end. Our average is the same as one week ago. One note that we believe our readers should know: our survey this week has a very large percentage of the respondents reporting $29.00/cwt base prices. Our average, which is not weighted, may be slightly understated based on the strength of the $29.00/cwt base prices being reported. SMU anticipates galvanized prices to move slowly higher over the next 30 to 60 days.

Galvanized .060” G90 Benchmark: SMU Range is $619-$669 per net ton with an average of $644 per ton FOB mill, east of the Rockies.

Galvanized Lead Times: 4-8 weeks.

Galvalume Coil: SMU Base Price Range is $28.50/cwt-30.50/cwt ($570-$610 per net ton) with an average of $29.50/cwt ($590 per ton) FOB mill, east of the Rockies. Both the upper and lower end of our range did not move compared to one week ago. Our average also remained the same as one week ago. Our expectation is for Galvalume prices to slowly move higher over the next 30 to 60 days.

Galvalume .0142” AZ50, Grade 80 Benchmark: SMU Range is $861-$901 per net ton with an average of $881 per ton FOB mill, east of the Rockies.

Galvalume Lead Times: 5-8 weeks.

SMU Note: Below is an interactive graphic showing our hot rolled, cold rolled, galvanized, and Galvalume price history. You can only view this interactive graphic when you are logged into the website and reading the newsletter there. If you need help navigating the website or need to know your login information, contact us at info@SteelMarketUpdate.com or by calling 800-432-3475.

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