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    February 21, 2019

    SMU Price Momentum Indicator Adjusted from Neutral to Higher

    Written by John Packard

    This morning, Steel Market Update adjusted our Price Momentum Indicator on flat rolled from Neutral to Higher. Our Price Momentum Indicator was last adjusted on Jan. 28, 2019, when we moved from Lower to Neutral as the domestic steel mills, led by Nucor, began announcing price increases. It is normal for SMU to adjust our indicator to Neutral when price announcements are made. Then we wait for signs from the market to see if the increases will be collected and if momentum has been altered.

    There have been two price increase announcements totaling a minimum of $80 per ton since the Jan. 28. We have only seen a slight improvement in benchmark hot rolled prices ($5-$15 per ton) since coming off the lows. However, the mills appear determined to get the spot base price to $700 per ton ($35.00/cwt), and we are hearing from most steel buyers that they expect the $700-$720 levels to stick over the next few weeks. However, few think the market is strong enough to go to $730 per ton.

    John Packard

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