SMU Data and Models

SMU's October at a Glance

Written by David Schollaert

November 6, 2023

Steel prices began to recover last month, ending a downward trend we’d been seeing since mid-April. Hot-rolled coil (HRC) prices ended October at an average of $810 per ton ($40.50 per cwt), having rebounded by $165 per ton during the month.

The SMU Price Momentum Indicator for sheet products pointed Higher, shifting from the Lower position as tags rallied in response to repeated mill price hikes throughout the month.

The Price Momentum Indicator on plate, which shifted to Lower at the close of September, continues to point Lower as tags have continued to show signs of weakness due to waning demand.

Raw material prices have fluctuated somewhat but were again mostly sideways last month. Scrap prices were largely flat on average in October, except for shredded and #1 HMS, which declined by roughly $10 per gross ton from September. Despite some movement mid-way through the month, zinc and aluminum spot prices were largely stable, remaining within historical levels. You can view and chart multiple products in greater detail using our interactive pricing tool here.

The SMU Steel Buyers Sentiment Index remained positive and recovered a bit, edging up during the month. Current Buyers Sentiment rose from +59 in September to +61 on average in October. Future Sentiment hovered at an average of roughly +75, up slightly from the prior month’s reading of +73.

Our Steel Buyers Sentiment 3MMA Index (measured as a three-month moving average) has been eroding over the past four months, falling to +58 in October from +59 the month prior.

Hot rolled lead times averaged 5.83 weeks in October, up from 4.63 weeks the month prior. SMU expects lead times to hover around current levels, but market chatter suggests they could increase in November should restocking occur for the first quarter of 2024, especially as the UAW strike looks to have ended. A history of HRC lead times can be found in our interactive pricing tool as well.

About 62% of HRC buyers reported in October that mills were willing to negotiate on prices, down from roughly 91% in September.

Key indicators of steel demand are still showing some signs of weakness overall and are nowhere near the bullish levels some had shown earlier in the year. While there are some backlogs in the energy and construction sectors, the potential end of the UAW strike on Detroit’s “Big Three” automakers could prop up demand into Q4 and early 2024, with an additional impact on steel prices.

See the chart below for other key metrics for October:

David Schollaert

David Schollaert is a senior analyst for Steel Market Update. David joined SMU after more than a decade in the metals and mining industry in a myriad of different roles. Much of his early experience and expertise were within the coverage and analysis of steel-making raw materials and served previously as senior editor of the CRU Prices Service. Most recently, however, before his return to market analysis, David held roles as a metals buyer and an operations manager for raw material suppliers. Based in CRU’s Pittsburgh office, David can be reached at david@steelmarketupdate.com or 724-720-1008.

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