February and its 20 shipping days is now behind us. It is time to take a look at how the data for the month played out.
SMU Price Momentum Indicator ended the month just as it had begun the month (as well as the New Year), pointing toward lower flat rolled steel prices in the coming thirty days.
SMU Steel Buyers Sentiment Index averaged +49.5 for the month but, our index did end the month on an upswing at +53. Our three month moving average (3MMA) continued to decline and stood at +52.83 at the end of February, down 2.5 points from January’s +55.33.
Benchmark hot rolled ended the month averaging $516 over the four weeks reported. We were the same as the Platts average during the same time period. CRU was $10 per ton higher than both SMU and Platts at $526 per ton for the month.
Scrap prices were significantly lower on all products (#1 HMS, shredded and #1 busheling) in the Midwest.
Zinc and aluminum spot prices remained essentially unchanged compared to January.
Capacity utilization rates declined which is not a good omen for the domestic steel mills.
One of the reasons why utilization rates have declined is due to the drop in drilling rigs in the U.S. which averaged 1,882 rigs in January and now are down to an average of 1,348 rigs in February. This is a loss of 534 drilling rigs.
Apparent Excess, which is a Premium product, calculates whether the U.S. service centers are over inventoried or under-inventoried. We saw a slight dampening to the excess inventory levels for flat rolled. Distributor inventories continue to be in excess but are down 82,000 tons compared to the month of January. At 1.1 million tons, service centers still have a long way to go.
The HRC (hot rolled coil) futures forward curve is in contango (prices are higher the further you go out into the future) with September 2015 showing $550 per ton.
John PackardRead more from John Packard
Latest in SMU Data and Models
SMU price ranges: Sheet surge continues on limited spot availability
Sheet prices shot higher again this week on the heels of another round of mill price increases as well as on reports of production and supply chain issues at certain domestic producers.
SMU’s November at a glance
Steel prices continued to rally last month on the back of repeated mill price increases after tags reached a 2023 low of $645 per ton in late September. Hot-rolled coil (HRC) prices ended November at an average of $923 per ton ($46.15 per cwt), rising by $140 per ton during the month. The SMU Price […]
SMU survey: Steel Buyers Sentiment Indices rise
SMU’s Current and Future Steel Buyers Sentiment Indices have both increased, based on our most recent survey data as of Wednesday, Nov. 22.
SMU survey: Lead times extend as pricing climbs
Lead times for all steel sheet products but cold rolled were extended last week as prices trend upwards.
SMU survey: Mills less willing to talk price on sheet, plate
The percentage of steel buyers saying mills were willing to negotiate spot pricing has fallen for all products SMU surveys, according to our most recent survey data.