Steel Products Prices North America

SMU Price Ranges & Indices: More Weakness in Hot Rolled & Cold Rolled

Written by John Packard

September 29, 2016

Every Tuesday Steel Market Update publishes our flat rolled steel price ranges and index averages. Throughout the week we analyze information gathered from steel buyers from around the country. At times we spot a trend developing but don’t have enough price points to justify fully adjusting either the lower or upper end of our range. We saw that this week on hot rolled and cold rolled and we are, therefore, adjusting our HRC and CRC price ranges and averages to account for the new information developed since Tuesday.

We are finding the lower end of our hot rolled range has broken through the psychological $500 per ton barrier with buyers reporting offers in the market as low as $480 per ton.  A service center told us on Wednesday, “…seeing $490-$500 FOB Chicago for regular tonnage.” The comment at the end is important to us in that “regular tonnage” means the mills have dropped their quantity demands in order to obtain the under $500 per ton pricing.

We are adjusting our hot rolled range to $480-$540 per ton which takes our average to $510 per ton. Our average is $5 per ton lower than what we published on Tuesday and we are down $10 per ton compared to last week. We do want to note that we are finding few offers at the upper level ($540) of our range and the trend indicates a move toward consolidating prices right around the $500-$510 mark this week. Momentum is for hot rolled prices to continue to move lower over the next 30 days.

As we continue to collect data from steel buyers we are also finding cold rolled numbers as published on Tuesday were slightly over-stated. We are reducing the lower end of our range from $710 down to $700 per ton ($35.00/cwt) and the upper end of our range from $760 down to $750 per ton ($37.50/cwt). Our average is now $725 per ton down $10 per ton from Tuesday’s number and $35 per ton lower than one week ago. Momentum is for CR prices to move lower over the next 30 days.

We are not touching our galvanized and Galvalume numbers at this time although momentum on both of these products is for prices to move lower over the next 30 days.

We will have to watch to see if the new circumvention complaint against Vietnam/China will have any effect on CR and GI/AZ pricing. The first thing to watch are lead times at the domestic mills, especially the conversion mills and mini-mills.

John Packard

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