Economy
SMU's August at a Glance
Written by Brett Linton
September 6, 2022
Steel prices eased overall throughout August, following declines seen in the three previous months. Hot rolled prices were $805 per ton ($40.25 per cwt) the first week of August, falling to a low of $770 per ton in the middle of the month, and rising to $785 per ton as of last Tuesday. The SMU Price Momentum Indicator was adjusted from Lower to Neutral for sheet products on August 9th. Price Momentum on plate remains at Lower since our May adjustment.
Raw material prices were down overall, further declining from April’s historical highs. Scrap prices fell $15-70 per ton over July, with busheling and shredded prices within $10 per ton from each other. Sources expect scrap prices to hold steady and possibly increase in September. Click here to view and compare prices using our interactive pricing tool.
Zinc spot prices increased moderately throughout the month, while aluminum prices were relatively steady. Per Kitco, zinc spot prices rose from $1.54 per pound at the beginning of the month to $1.62 per pound by Aug. 31. Prices peaked a $1.68 per pound on Aug. 11. Aluminum spot prices fluctuated between $1.16–1.24 per pound throughout August, similar to July levels according to Kitco. Aluminum prices remain on the low side compared to what we’ve seen over the past year.
The SMU Buyers Sentiment Index remained positive and steady throughout August, while Future Sentiment fell towards the end of the month, now at the fourth lowest level of the year. Viewed as a three-month moving average, Buyers Sentiment fell to +58.67 through the end of the month, the lowest level recorded since October 2020.
Hot rolled lead times averaged 4.1 weeks in August. The percentage of buyers reporting that mills are willing to negotiate on prices remains high. Through last week, 86% 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 remain overall positive. The energy market continues to recover, and while construction activity slowed slightly in July, it remains strong. Import and export volumes were up slightly in June, and apparent steel supply remains healthy.
See the chart below for other key metrics in the month of August:
By Brett Linton, Brett@SteelMarketUpdate.com
Brett Linton
Read more from Brett LintonLatest in Economy
Architecture firm billings remain down in January
Architecture firms continued to report a sharp reduction in billings in January, according to the latest Architecture Billings Index (ABI) released by the American Institute of Architects (AIA) and Deltek.
New York state manufacturing rebounds in February
Business activity in New York state’s manufacturing sector recovered nicely in February after a sharp decline the previous month, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York. The general business conditions index rose 18 points to 5.7. This is a diffusion index, where a positive reading signifies […]
Dodge Momentum Index jumps to record high in January
The Dodge Momentum Index (DMI) rose to a record high in January, according to the latest data released by Dodge Construction Network.
CRU: China hits back with retaliatory tariffs on US
Targets include coal, liquified natural gas, crude oil, and other commodities
ISM: Manufacturing expands in January for first time in years
Following more than two years of contraction, US manufacturing activity rebounded in January according to the Institute for Supply Management.