Flat Rolled Steel Price Rally Hits One-Year Milestone

On Aug. 11, 2020, Steel Market Update reported benchmark spot hot rolled coil prices averaging $440 per ton ($22.00/cwt) with lead times averaging 4.0 weeks. SMU’s check of the market this week puts the average HRC price at an astounding $1,900 per ton ($95.00/cwt) with lead times in excess of 10 weeks.

John Packard, SMU CEO, has been involved in the steel industry since 1977. He cannot recall any time during those 44 years when steel prices rose on a consistent and steady basis for more than a handful of months. For steel prices to climb steadily week after week for an entire year is unprecedented.

When looking at the historical price graph going back to late 2007 (see below), you feel like you have whiplash at the pace and steepness of the price curve (I guess we can’t use the term “curve” here because the line is straight up). It’s like we were climbing the Blue Ridge Mountains prior to August 2020 and then we ran into the Himalayas.

Of course, whether it is the Blue Ridge Mountains or the Himalayas, there is another side. The question that is being asked (and will be discussed at this year’s SMU Steel Summit Conference) is, will we see a one-year downward spiral or a series of valleys and plateaus?

But, hey, it’s the steel business with the beauty being no one knows….

Stay tuned as we think the next 12 months will be just as interesting as the last 12.