Steel Products Prices North America

SMU Price Ranges & Indices: Make Me an Offer

Written by John Packard

September 29, 2015

Flat rolled steel prices remained “flexible” over the past week. During our conversations with steel buyers (and steel mills) we learned that the best prices were being offered on tonnage tied to an actual order. One of the big issues we face as we try to develop fair and reasonable price ranges is how do we handle mills as they waive extras, freight equalize or just eat all of the freight to a specific location? It is difficult to balance where base prices are with the $10, $20 and sometimes larger giveaways being provided by the steel mills. We intentionally say “the steel mills” as we do not know of a mill that is not negotiable when it comes to extras and possibly freight. Whatever it takes to get the deal done. We will discuss this more in the coming days.

Many of the buyers with whom we spoke provided us the old, “If I had tons to buy this is where I could get them.” We have no choice but to discount those numbers as sometimes wishful thinking. Even so, we see the market as soft, the number of spot orders being placed are hand to mouth only – no one is building inventory.

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 $410-$450 per ton ($20.50/cwt- $22.50/cwt) with an average of $430 per ton ($21.50/cwt) FOB mill, east of the Rockies. Both the lower and upper ends of our range stayed the same compared to our last published prices. Our overall average is unchanged compared to one week ago. SMU price momentum for hot rolled steel has prices moving lower and we are aware of the “rumors” of deals being done at, or below, $400 per ton. With scrap poised to drop $20 to $40 per ton (and perhaps more in some regions) the mini’s will be able to move lower if they need to. We think the customers will convince them that they need to.

Hot Rolled Lead Times: 2-4 weeks.

Cold Rolled Coil: SMU Range is $520-$580 per ton ($26.00/cwt- $29.00/cwt) with an average of $550 per ton ($27.50/cwt) FOB mill, east of the Rockies. The lower end of our range declined $20 per ton compared to week ago while the upper end remained the same. Our overall average is down $10 compared to last week. SMU price momentum on cold rolled steel is for prices to slip lower in the next 30 days. We expect the high end of our range will compress pushing our average lower in the coming weeks.

Cold Rolled Lead Times: 4-7 weeks.

Galvanized Coil: SMU Base Price Range is $26.00/cwt-$28.50/cwt ($520-$570 per ton) with an average of $27.25/cwt ($545 per ton) FOB mill, east of the Rockies. The lower end of our range declined $20 per ton compared to last week while the upper end decreased $10 per ton. Our overall average is down $15 over one week ago. Our price momentum on galvanized steel is for prices to move lower – especially when taking Nucor’s move to adjust their coating extras in light of the lower zinc costs. We expect the rest of the steel mills to follow suit over the next couple of weeks.

Galvanized .060” G90 Benchmark: SMU Range is $589-$639 per net ton with an average of $614 per ton FOB mill, east of the Rockies.

Galvanized Lead Times: 4-7 weeks.

Galvalume Coil: SMU Base Price Range is $27.50/cwt-$29.50/cwt ($550-$590 per ton) with an average of $28.50/cwt ($570 per ton) FOB mill, east of the Rockies. The lower end of our range declined $10 per ton compared to week ago as did the upper end of our range. Our overall average is down $10 compared to last week. Like the other flat rolled products mentioned above our price momentum for Galvalume is currently pointing towards Lower prices over the next 30 days.

Galvalume .0142” AZ50, Grade 80 Benchmark: SMU Range is $841-$881 per net ton with an average of $861 per ton FOB mill, east of the Rockies.

Galvalume Lead Times: 5-8 weeks.

SMU Note: Below is a graphic showing our hot rolled, cold rolled, galvanized, and Galvalume price history. To use the graphs interactive capabilities, you must view it on our website here. 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.

John Packard

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