SMU Price Ranges & Indices: Prices Move Lower

Steel buyers are beginning to sit on their hands as they watch the damage being done to the economy by the efforts to fight the spread of the COVID-19 pandemic. The problem when buyers begin to sit back and wait is there are limited spot buys actually happening in the market, and many times there can be quite a spread from low to high. That is what we picked up today. The low end of our range was lower than we anticipated (and in some cases we actually picked up data points lower than our print below) while the upper end of our range was higher (one mill sent SMU a note to say they did book a $600 per ton hot rolled spot order today, which is higher than the high end of our range). The key for steel buyers is to understand there is a range and that spot pricing actually can vary from mill to mill.

Because of the limitations associated with the number of spot purchases actually happening this week, SMU reached out to a number of domestic steel mills to confirm what we were hearing from steel buyers. This is normal for us, but this week we increased the number of mill check points because we feel the market is at a critical point. In most cases the mills were surprised by some of the low numbers we were collecting and offered guidance as to their order books and what their sales groups were reporting back to management.