Prices
February 11, 2014
SMU Price Ranges & Indices: More Slippage
Written by Brett Linton
Perhaps one of my steel sources described the current environment surrounding the flat rolled steel industry best when they said, “Welcome to the Charles Dickens version of the steel industry – ‘It was the best of times, it was the worst of times. It was the season of hope, it was the winter of despair…’ Ask a steel analyst, a mill CEO, a service center executive, and an OEM purchasing agent their take on the steel market and you are likely to hear 5 different stories. If you purchase from a fully integrated mill you are bound to hear something different than if you purchase from a conversion mill. It is hard to decipher whether fundamentals or market psychology are truly driving this market…and even harder to make impacting decisions based on facts (what is really happening) versus noise (what is potentially going to happen).”
A service center executive made similar observations when he told SMU that the market is “breaking for sure” but, at the same time where prices fall “depends on the mill.” The integrated mills have the strongest order books and the firmest of prices. However, one of the integrated mills (AK Steel) was reported to have hot rolled coil to sell for late February/early March and at prices at the lower end of the range. We were told that with “tons” a large hot rolled buyer could purchase material below $630 per ton. However, Steel Market Update does not consider those prices to be available for medium sized customers (at this time).
