Steel Products

CRU Press Release

Written by John Packard

One week ago, ArcelorMittal circulated their price increase announcement and in their internal memo the company raised the issue of, “The market manipulation and discounting of the CRU has had a dampening effect on industry spot prices.” AM then went on to raise prices by $45 per ton but did so by taking the benchmark CRU numbers and adding $45 per ton to them in order to obtain their new spot base prices.

Steel Market Update spoke with CRU who assured us their relationship was sound with ArcelorMittal and we concluded the mill reference was pointed at the competition and not the collectors of the data. On Wednesday of this week, CRU published a press release celebrating their 33 years of spot price data collection. Here is the full release:

“The CRU index has withstood challenges over 33 years as it has evolved from a monthly spot price appraisal to the most robust, transparent methodology available today. What began 33 years ago has now been in full use since 2008 as the price index used to settle CME’s U.S. Midwest HRC steel futures and options contracts, as well as thousands of physical contracts over the past decade.

The U.S. Midwest HRC, which began in 1980, was published on a monthly basis (2nd Wednesday of each month) until it became weekly in February 2009. The index currently utilizes our most sophisticated ‘Level 2.0’ procedures, publically available to download at

ArcelorMittal is comfortable that CRU is consistent with its methodology in deriving and publishing its assessments”, said Dan Mull, Executive Vice President of Sales & Marketing at ArcelorMittal USA.

The CRU index is made up of submissions from data providers that have to be invited to participate with the split of producer reported prices accounting for 50.76% of submissions in 2012 with buyers submitting the balance of 49.24% of volume. Data providers consist of reputable, respected and established companies that make up the entire steel supply chain. From integrated and mini mills to service centers, traders, tube companies and other end users of HRC, CRU’s data providers are the cream of the crop.

Our U.S. Midwest price index is the most balanced and robust for HRC worldwide. The sophisticated Level 2.0. procedures we employ boast a unique feature among ferrous related price reporting agency methodologies ? the right to audit the data we receive”, said Glenn Cooney, Head of Operations at CRU Indices. “Data submitted is clean, as submissions are subject to statistical checks with outliers removed. Also, a 30% cap weighting is applied to ensure that no single data point accounts for more than 30% of the total. Additionally, the U.S. Midwest HRC index is approved by Josh Spoores, CRU’s North American Steel Analyst who has a rich and intimate knowledge of the market”.

Further information is available at

Steel Market Update encourages those who are interested in learning more about the CRU indices to visit their website.  Furthermore, SMU believes it is important to have multiple indices across the markets and we try to maintain cordial relationships with all of them.  If you have any questions you are welcome to contact Josh Spoores at regarding the CRU indices or you may contact John Packard at regarding the SMU indices.

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