SMU Data and Models
Service Center Spot Prices in Transition
Written by John Packard
April 25, 2017
Both manufacturing companies and service centers are reporting distributor spot prices as being in a state of transition. The percentage of manufacturing companies reporting service centers as raising spot flat rolled steel prices has dropped from 50 percent at the beginning of April to 19 percent. At the same time 19 percent of the manufacturing respondents are now reporting distributors as offer spot prices lower than one month ago when no one (0%) reported spot prices as dropping.
Service centers reported similar results as the manufacturers with 18 percent reporting their company as raising spot prices. The vast majority of our service center respondents (71%) reported spot flat rolled prices coming out of their company as remaining the same. Only 11 percent reported their company as dropping prices.
As you can see by the two graphics the market has been a little topsy-turvy over the past couple of months. Due to this instability Steel Market Update has our Price Momentum Indicator at Neutral. A Neutral indicator means prices are in transition and could move in either direction as we wait for a strong push on supply or demand that will result in prices moving in concert in one direction.
John Packard
Read more from John PackardLatest in SMU Data and Models
SMU Survey: Sheet lead times inch up, plate moves lower
Sheet times ticked higher but remain within days of multi-year lows, territory they have been in since May. Plate lead times have shifted lower in the past month but remain about a week longer than they were at this time last year.
SMU Survey: Mills slightly less negotiable on spot pricing
Sheet and plate buyers say mills remain open to negotiating spot prices this week, though less so than in recent weeks, according to SMU’s latest market survey.
August service center shipments and inventories report
US service centers flat-rolled steel supply in August declined month-over-month (m/m) and year-over-year (y/y), according to SMU data.
Apparent steel supply remains elevated in July
Apparent supply totaled 8.88 million short tons (st) in July, down 38,000 st from June and 6% higher than the same month last year
HRC vs. prime scrap spread narrows slightly
The price spread between prime scrap and hot-rolled coil (HRC) narrowed by a hair this month, according to SMU’s most recent pricing data.