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    January 21, 2013

    SMU Fair Value Model Has HRC Spot Pricing Below Fair Value for 1st Time in 9 Weeks

    Written by John Packard

    This week, the SMU Fair Value HRC (hot rolled coil) Model has spot HRC pricing below Fair Value for the first time in nine weeks. This is due to the SMU average spot HRC index decreasing $5 per ton to $620 per ton and scrap inputs remaining the same over last week’s figures. The Fair Value model now shows HRC prices $3 below the estimated Fair Value price.

    As a reminder, the Fair Value HRC Model below came from the SMU acquisition of Steel Reality. The graph below demonstrates the relationship between scraps inputs creating an estimated “Fair Value” for HRC versus the actual spot price.

    John Packard

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