Economy

SMU's March at a Glance

April 1, 2022

Steel prices rose each week in March, and the increases were the first in six months. Hot rolled prices were down to $1,000 per ton ($50 per cwt) the first week of March, the lowest level seen since December 2020. Prices then surged $435 per ton throughout the month, with the SMU index averaging $1,435 per ton as of last Tuesday. The SMU Price Momentum Indicator for hot rolled steel was adjusted to Higher on March 8, with all other products following the next week. Recall that Momentum was previously adjusted from Lower to Neutral the last week of February.

Raw material prices surged in March, with scrap prices up $125-170 per ton from February. Click here to view and compare prices using our interactive pricing tool.

Zinc and aluminum spot prices also increased this month. The Kitco spot price for zinc was $1.72 per pound on March 1, reaching a high of $1.96 one week later, and ending the month at $1.90. Aluminum prices rose from $1.59 per pound at the beginning of the month to $1.76 on March 8, easing to $1.67 as of March 31.

The SMU Buyers Sentiment Index remains high, with optimism growing from +68 to +82 last month. Viewed as a three-month moving average, buyers’ sentiment declined slightly to +73.00 in late March. Future sentiment readings remain optimistic, as they have been for over a year and a half.

Hot rolled lead times ticked up in March, moving from 4.1 to 5.6 weeks in four weeks (levels last seen in November 2021). Recall lead times were relatively stable prior to this, hovering around 4 weeks from mid-January through early March. The percentage of buyers reporting that mills are willing to negotiate on hot-rolled coil prices declined considerably, with the last two March data points indicating only 20-23% mills are willing to talk price to secure an order. A history of HRC lead times can been seen within our interactive pricing tool.

Key indicators of steel demand are positive overall; the AIA Billings Index indicated that construction activity remains strong, and the energy and automotive sectors continue to improve. Total US apparent steel supply is relatively high at over 9 million tons per month, and we are seeing strong construction spending levels.

See the chart below for other key metrics in the month of March:

March at a glance

By Brett Linton, Brett@SteelMarketUpdate.com

Brett Linton

Brett Linton is a senior analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at brett@steelmarketupdate.com or 724-314-0179.