SMU Data and Models

SMU Market Trends: Near Unanimity on Price Increase

Written by Tim Triplett

December 21, 2017

More than nine out of 10 respondents to Steel Market Update’s latest market trends questionnaire see steel prices heading higher in the first quarter. Seven percent say they see no clear direction for prices. Virtually no one expects prices to decline in the wake of price hike announcements by the major mills earlier this month. Whether the mills are able to collect all or part of their increases will be determined by market forces in the coming months.

Following is a sampling of steel buyers’ comments:
• “Fundamentals are all pointing toward a higher market for Q1.”
• “Prices are going up. The only question is how high and for how long?”
• “Not sure if the high for HRC base will be $700 or $750 for 2018.”
• “Raw material costs continue to slowly increase (iron ore, coking coal, zinc) and now the rise in scrap will push prices up in the first quarter.”
• “Hot rolled will lead the way—tied to scrap and not much in the way of import competition.”

Not every respondent feels positive about the price trend:
• “Knowing there have already been price increases announced, I just don’t know how they are justified. I don’t think they will hold.”
• “Mill prices are going up. Service center selling prices are not going higher.”
• “The continued threat of Section 232 and the circumvention ruling on coated products points to a very protectionist government, which will lead to a short-term price gain for the mills, but longer-term pain.”

Tim Triplett

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