Economy

SMU's August at a Glance

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:

August 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.