SMU Market Trends: Prices on an Upward Trajectory?

Following is a sampling of buyers’ comments:

• “All indicators are that the domestic environment will be ripe for an attempt at a price increase.” Service Center/Wholesaler
• “At least for the beginning of the first quarter.” Manufacturer/OEM
• “Due to scrap cost increasing and lower imports.” Service Center/Wholesaler
• “Mills are getting small increases and will continue to get more in the future.” Trading Company
• “As soon as lead times extend domestic mills will get increases. Short lead times are preventing much traction for now. But the herd will prevail.” Trading Company
• “The first six months will be influenced by the Section 232 findings currently scheduled to be released in January.” Manufacturer/OEM
• “With the potential for additional duties, and if the mills continue to control supply, momentum will eventually swing towards price increases.” Manufacturer/OEM
• “Most indicators point to economic strength. However, lead times aren’t moving out dramatically, and input prices are relatively stable.” Manufacturer/OEM
• “Zinc extras are the wild card.” Manufacturer/OEM

Not all buyers are convinced a price hike is inevitable, however:

• “I think it’s 50/50 at this time.” Service Center/Wholesaler
• “Possibly, especially in the first quarter. After that, who knows?” Service Center/Wholesaler
• “Mills will push for an increase in January, but I don’t believe it will have any teeth. The first quarter will be flat. The market will hinge on true demand, if there is any.” Service Center/Wholesaler
• “Zinc extras will be increased across the board, but base prices may slide.” Service Center/Wholesaler
• “We are waiting for the shift upwards on pricing, but the market still doesn’t have any footing. Perhaps the anticipated increase of scrap prices will be what it takes for the market to take shape.” Service Center/Wholesaler
• “It seems the stars are aligned, but there always seems to be a point of weakness that comes up to stop prices from climbing.” Service Center/Wholesaler
• “The market has that odd aura of things either going to $580 or $680 in a month or so. I feel the mills will be solid through January, but I’m not sure what the demand scenario looks like going into late Q1. My hope is we see business similar to 2017, with pricing in a fairly narrow band.” Service Center/Wholesaler