Economy

SMU's April at a Glance

May 3, 2022

Steel prices were relatively steady in April, following increases in March. Hot rolled prices were at $1,460 per ton ($73 per cwt) the first week of April, the highest level seen since January 2022. Prices then bounced around within a $30 per ton range for the remainder of the month, with the SMU index averaging $1,450 per ton as of last Tuesday. The SMU Price Momentum Indicator was adjusted to Neutral for all steel products on April 12 and remains at that position today. Recall that the Momentum Indicator was previously adjusted from Neutral to Higher in early March.

Raw material prices remained historically high in April, with scrap prices down $20 to up $75 per ton from March. Click here to view and compare prices using our interactive pricing tool.

Zinc spot prices climbed to record highs this month, then began to ease. The Kitco spot price for zinc was $1.97 per pound on April 1, reaching a high of $2.05 per pound on the 19th, and ending the month at $1.89 per pound. Aluminum prices continue to decline from March highs, moving from $1.66 per pound at the beginning of the month to $1.46 per pound on April 29.

The SMU Buyers Sentiment Index remains high, with optimism ranging from +78 to +82 last month. Viewed as a three-month moving average, buyers’ sentiment rose to +76 as of the end of the month, a level not seen since late 2021. Future sentiment readings also remain optimistic, as they have been for over a year and a half.

Hot rolled lead times peaked in mid-April at 5.8 weeks (levels last seen in November 2021), declining to 5.3 weeks by the end of the month. Recall lead times were relatively stable prior to March, hovering around 4 weeks in January and February. The percentage of buyers reporting that mills are willing to negotiate on hot-rolled coil prices grew throughout the month. Late April data indicates over half of mills are now willing to talk price to secure an order, up from 20% in early April. 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 fell to 8.4 million tons in February, down considerably compared to the prior 9 months but still strong historically. We continue to see healthy construction spending levels throughout the latest data.

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

April 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.