SMU Data and Models

March at a Glance
Written by John Packard
April 1, 2014
Flat rolled steel pricing momentum reversed course due to the price increase announcement led by ArcelorMittal and followed by virtually all of the domestic and Canadian steel mills. We moved the SMU Price Momentum Indicator first to Neutral and then a week later to Higher in response to the increase announcements and the fact that the mills began collecting higher prices on flat rolled steels.
The SMU Steel Buyers Sentiment Index last measured in mid-March was +40 which is well within the optimistic range of our Index.
Hot rolled prices averaged $626 per ton for the month which was $1 per ton higher than the CRU average of $625 per ton. We are adding a new line item to our monthly recap. The line item is noted as Other Contract Index Platts so our readers can compare CRU, Platts and SMU with CRU and Platts now being used as contract adjustment vehicles. Platts average for HRC for the month was $643 per ton, $18 per ton higher than CRU and $17 per ton higher than SMU.
Scrap prices were down in the Chicago area markets. Iron ore spot pricing in China was also down although the commodity has been bouncing back over the past few days.
SMU service center inventories stood at 2.25 months as of mid-March while MSCI had their inventories at 2.3 months on a seasonally adjusted basis as of the end of February.
Auto sales have been lower than originally forecast at 15.3 million units (annualized) at the end of February. Projections are for sales closer to 16.5 million units during the full calendar year.

John Packard
Read more from John PackardLatest in SMU Data and Models

SMU Survey: Buyers’ Sentiment tumbles as caution increases
SMU’s Buyers’ Sentiment Indices resumed their downward trend this week, erasing the modest recovery seen two weeks ago.

Service centers: Mill orders down further in April
SMU’s Mill Order Index (MOI) declined for a second straight month in April after repeated gains at the start of the year, according to our latest service center inventories data.

SMU Survey: Mill lead times edge lower
Sheet and plate lead times declined across the board this week, according to buyers responding to the latest SMU market survey. While our lead time ranges were unchanged compared to mid-April levels, average production times for each steel product we measure have declined from they were two weeks ago.

SMU Survey: Most buyers say price negotiations back on the table
Domestic mills are largely negotiable on spot prices, according to the majority of steel buyers responding to our latest market survey.

SMU Scrap Survey: Current, Future Sentiment Indices log declines
However, in a month plagued by tariff and economic uncertainty, both current and near-term outlooks for our scrap survey respondents remained surprisingly optimistic.