SMU's July at a Glance

Zinc spot prices were steady for most of July but began rising the last few days of the month. Per Kitco, zinc prices hovered between $1.35-1.43 per pound from July 1 through July 27. Last Thursday the spot price rose to $1.47 per pound, rising again Friday to $1.52 per pound. The spot price as of Tuesday afternoon was $1.54 per pound.

Aluminum spot prices fluctuated between $1.15–1.22 per pound throughout July, according to Kitco. Aluminum prices are currently on the low-side compared to what we’ve seen over the past year.

The SMU Buyers Sentiment Index remains positive but has been easing since April, with optimism declining from +60 in early July to +43 at the end of the month. Sentiment is now at the lowest level since August 2020. Viewed as a three-month moving average, buyers’ sentiment fell to +63.33 through the end of the month. Our Future Buyers Sentiment Index has also shown signs of cracks emerging: the index slipped from +54 to +43 as of late July, also the lowest level recorded since August 2020.

Hot rolled lead times peaked in mid-April at 5.8 weeks. They have declined each month since, averaging 4.0 weeks in July. The percentage of buyers reporting that mills are willing to negotiate on prices remains high. Through the end of July, 89–94% of flat-rolled buyers reported that mills were willing to talk price to secure an order. A history of HRC lead times can been found within our interactive pricing tool.

Key indicators of steel demand remained positive through May and June data. Energy and automotive sectors continue to recover. Construction activity slowed in June but remains strong. Import and export volumes were down slightly in May compared to recent months, but apparent steel supply remains healthy at 9.5 million tons.

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

By Brett Linton, Brett@SteelMarketUpdate.com