September at a Glance

For comparison sake, SMU took a look at the CRU average for hot rolled for the month of September and found it was $663 per ton (down $9 per ton) while the Platts HRC average was $667 per ton (down $14 per ton).

SMU Steel Buyers Sentiment Index continued to be well within the optimistic range of our index. However, it did drop by 5 points compared to the two prior months. When looking at it for a 3 month moving average perspective in order to “smooth out the bumps” as Peter Wright likes to say, we found the trend continues to be building optimism as July was +59.83, August was +60.83 and September was +61.83.

For galvanized and Galvalume buyers, zinc and aluminum prices remained relatively stable at $1.0392 per pound (zinc) and $0.8904 per pound (aluminum).

The big mover for the month was spot iron ore prices in China which fell for the third straight month. In the September column is our average for the month ($81.7/dmt) but what you should look at is our weekly data which saw iron ore at $77.6/dmt on the 29th of September.

The other item you may want to look at is MSCI inventories for flat rolled (non-seasonally adjusted) has inventories rising ever so slightly over the past three months. The column to review is our SMU Apparent Excess/Deficit which has the deficit essentially disappearing over the last two months and we are forecasting (for our Premium clients) that service center inventories will move into an excess situation in the coming months.

The HRC forward curve is at $635 per ton ($20 per ton below our current number and $21 below the current CRU number).