Market Data
SMU Survey: Majority Report Less Than 50% of Last Increase has Been Collected
Written by John Packard
March 25, 2013
According to the results of our most recent steel market survey, 62 percent reported “some” of the increase (less than 50% of the increase amount) has been collected. Another 5 percent reported “most” of the increase as being collect (more than 50% of the announced amount) while 33 percent reported “none” of the announced increase as being collected at this point in time.
The price increase in question began on February 26th when U.S. Steel announced a $50 per ton increase. At that point in time the SMU hot rolled index average was $600 per ton. This coming week will be four weeks since the initial announcement. SMU uses a 4-week benchmark to determine if an increase is successful (more than 50% collected), semi-successful or a failure. As of this past week our HR index was $10 per ton higher than where we were three weeks prior.
The first price increase announcement made this calendar year was by AK Steel on Monday, January 21st when they announced $40 per ton. On Tuesday, January 22nd SMU published our hot rolled index as being $610 per ton. Our index did reach $620 per ton before dropping back and 4 weeks after the announcement our index was once again at $610 per ton. For that reason we consider the announcement to be a failure. However, if the intention of the announcement was to put a floor on pricing then it could be consider a success as it did temporarily stop prices from eroding further.
On Tuesday of this week we will determine if the second announcement is to be considered a success based on our criteria.
John Packard
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