Economy
End of Month Review: September 2015
Written by John Packard
October 1, 2015
We ended the month of September recognizing that not only have steel prices been falling but the Momentum behind pricing turned negative during the month. Our SMU Price Momentum Indicator is now pointing toward Lower prices to be seen in the coming month or longer.
Sentiment, another Key Market Indicator, has been dropping as you can clearly see in the table below. Our three month moving average dropped by 3.5 points which is a significant move for our 3MMA.Stee
Prices moved lower with benchmark hot rolled coil prices ending the month at $430 per ton and our monthly average at $436 per ton, down $20 from the prior month.
When comparing our average to that of CRU ($444 per ton) and Platts ($446 per ton), we saw the market as slightly weaker than those two indexes.
Shredded scrap will be a big factor in October’s data. We had shredded at $233 per gross ton and we anticipate that it will be down close to $40 per ton once October settles.
Zinc and aluminum prices continued to be weak. Nucor made adjustments to their coating extras in a letter to their customers which referenced the weak zinc market as the reason for their move.
Iron ore spot prices in China were able to maintain their own during the month. Iron ore has been trading close to $55 per ton for a number of weeks.
Rig counts remain challenged and service center inventories did not shrink as expected but actually grew based on the SMU Service Center inventory analysis.
John Packard
Read more from John PackardLatest in Economy
US housing starts gain momentum in July
US housing starts rose in July both month-on-month and year-on-year, according to figures from the US Census Bureau.
Manufacturing in New York state improves again in August
Business activity in New York state improved modestly in August. It was just the second positive reading for the general business conditions index in six months.
President Trump intends to set additional steel tariffs
While boarding Airforce One on Friday, US President Donald Trump stated that he would be setting more steel tariffs and putting ~100% tariffs on semiconductors and chips.
Hot-rolled spot market conditions linger, prices slip
Market participants said they have high hopes that the stable hot-rolled spot market will improve as the year rolls on.
Dodge Momentum Index surges in July
The Dodge Momentum Index (DMI) jumped 20.8% in July and is now up 27% year-to-date, according to the latest data released by Dodge Construction Network.