SMU Price Ranges & Indices: Why the Mills are Pushing Increases

There are always reasons behind the domestic steel mills’ attempt to push flat rolled steel prices. One of the reasons, and the one we believe is being exercised by those mills who have already made price announcements, is prices have moved too low too fast. Based on Steel Market Update data, benchmark hot rolled coil peaked in early January at an average of $680 per ton (some were paying more at the time and some less). Since then the HRC price average has dropped by $60 per ton. This is a modest move within a pricing cycle but one that the domestic steel mills feel has gone far enough.

The price drop is even more severe on coated products which saw a moderate drop in their averages again this week. During our conversations with buyers this week many were left wondering if the sharp drops seen over the past few weeks could be stopped – especially with scrap prices down another $15 per gross ton this month. Many are waiting to see having bought at the numbers referenced below.