Steel Market Update Explains Steel Price Increases, Momentum & other related topics
For those who might have missed it – the domestic steel mills began the process of reversing price momentum as they announced flat rolled price increases ranging from AK Steel $50 per ton down to $30 per ton coming out of Nucor, NLMK USA, California Steel and USS/Posco. One mill did apply a base prices on hot rolled, cold rolled and coated products (galvanized & Galvalume).
Steel Market Update immediately took our SMU Price Momentum Indicator to Neutral from Lower and we explained our reasoning both in our newsletter on Thursday evening and on our Blog on Friday.
For those who are interested, SMU also published in Thursday evening’s edition of our newsletter a history of the AK Steel price announcements along with our Hot Roll price index over the past couple of years to give our readers a better feel for the history and success of past price announcements. A hint – they don’t always “stick.”
SMU will be watching the progress of negotiations between buyers and sellers of steel in the coming week. Next week we will begin our mid-March steel market survey and the status of negotiations is part of that survey process. SMU invites just over 700 companies to participate in our surveys which are held twice per month.
We anticipate having a much better handle on whether Momentum – which, by the way, our SMU/Steel Reality Index had HR prices below “Fair Value” and was forecasting a change in Momentum. We will publish our newest “Fair Value” reading on Sunday evening and our next SMU / Steel Reality Momentum Index on Tuesday evening at the same time as we publish our hot roll, cold roll, galvanized and Galvalume steel coil price indexes (indices).
Registration for our Price Volatility / Hedging Price Risk workshop is still open and we have a good group already registered. The next workshop will be in Chicago at the Chicago Board of Trade building on April 11, 2012. Working with SMU on this workshop is Andre & Jack Marshall of Crunch Risk, LLC and the CME Group. You can find more details about the workshop on our website: www.steelmarketupdate.com in the Events section.
SMU also has an excellent two-day workshop in Dearborn, Michigan where we will take a group through the steelmaking and rolling process (flat & long products), tour a fully integrated steel mill (Severstal Dearborn) and then spend time discussing Market Fundamentals. This includes what drives steel prices, risks in the supply chain and then available tools and resources which can assist in the understanding of the markets associated with the steel industry. The dates are: April 24 & 25, 2012 at the Dearborn Inn in Dearborn, MI (outside of Detroit). Registration is open and early bird discounts are available until March 24th. Go to the Events section of our website: www.steelmarketupdate.com or you can click on the top banner when the Steel 101: Introduction to Steelmaking & Market Fundamentals pops up.
We have an excellent newsletter coming out on Sunday evening. If you have not seen it before you can sign up for a two-week free trial on our website (there is a button to click on just below this blog post).
For those who have been thinking about it – you can become a member/subscriber to Steel Market Update by clicking on the “subscribe” button (one is located below this blog post) or by contacting our office at: 800-432-3475 (706-216-5440). Your first year membership comes with a warranty – if we are not able to provide value to you and your organization – you can request a full refund anytime during the first year of our membership.