SMU Data and Models

SMU Price Momentum Indicator Moved to Neutral
Written by John Packard
December 4, 2015
This morning, Steel Market Update (SMU) adjusted our Price Momentum Indicator from Lower to Neutral. This move is being made as we are seeing more evidence of the domestic steel mills taking a stand and either raising spot prices (especially on coated steels) or are refusing to go any lower.
As one steel buyer put it to SMU this morning, “The domestic mills are beginning to close their purse strings.”
There is a rising expectation, especially within those buyers of galvanized and Galvalume products that a price increase announcement may be made in the coming days. One large galvanized service center told us this morning they were expecting a $30 increase to be announced sometime next week.
We heard from a domestic steel mill this morning who told us, “We have had an excellent booking week. I feel that the next two weeks has multiple potential inflection points that could move the needle and some of our customers are clearly preparing for them and restocking ahead. We have two prelim dumping decisions, the enrollment deadlines for healthcare at mills, the AK Ashland decision, and settled/slightly firming scrap.”
This mill source went on to say, “I am not saying price is up for sure – just saying that the very least we have savvy customers placing orders now ahead of potential moves.”
We will have more on our move to Neutral in Sunday evening’s edition of Steel Market Update newsletter.

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

SMU Survey: Mills slightly less negotiable on spot pricing
Sheet and plate buyers say mills remain open to negotiating spot prices this week, though less so than in recent weeks, according to SMU’s latest market survey.

August service center shipments and inventories report
US service centers flat-rolled steel supply in August declined month-over-month (m/m) and year-over-year (y/y), according to SMU data.

Apparent steel supply remains elevated in July
Apparent supply totaled 8.88 million short tons (st) in July, down 38,000 st from June and 6% higher than the same month last year

HRC vs. prime scrap spread narrows slightly
The price spread between prime scrap and hot-rolled coil (HRC) narrowed by a hair this month, according to SMU’s most recent pricing data.

SMU Scrap Survey: Current Sentiment rises as Future Sentiment falls
SMU’s current Scrap sentiment index increased this month while future sentiment declined, according to our latest ferrous scrap survey data.