Final Thoughts

Here’s what some of the service center and manufacturing execs responding to SMU’s questionnaire had to say:

“For the next 45 days HRC mills can charge whatever they want.”

“I’m not sure it can go much higher, but I thought the same at $1,000 and $1,100.”

“It depends on availability in the second quarter. We just do not expect the market to really open up;  as furnaces come back online, others will go down. Buyers hate pricing at $1,200, so believe we are close to a peak, but we’re not expecting to fall off a cliff.”

“We believe HRC is peaking now. Demand for HRC is not nearly as robust as cold rolled and coated. Not weak, but no longer in a frenzy.”

“I believe the mills will try to get one more increase unless the chip shortage in the auto industry prevents it. But $1,200 is too high. There will be a correction, the question is when and how much.”

“Domestic mills are still pushing the limits with their ‘take it or leave it’ attitude. Total greed at this point.”

“I see it happening in late April or early May, there are too many other factors not being considered right now that could give this market staying power.”

“Other than flashy headlines, hitting a peak doesn’t mean it will immediately drop.”

“I wish articles would stop talking about all these stupid cracks in pricing that just aren’t there. It messes up the market.”

February Scrap Prices

Finished steel prices are influenced by the ups and down in scrap prices. SMU reported on Sunday that prime scrap prices were likely to settle sideways in February, while obsolete grades were looking to trade lower by $50-60/GT, following two months of significant increases. Trading was still ongoing at that point. One of SMU’s scrap sources offers the following update: “It’s apparent today that some mills did not buy as much as they would have liked to last week and have returned “quietly” to the market this week to try to secure more scrap, at higher prices than they would have paid last week. There have been some weather disruptions across the country that are contributing to the slowdown in scrap flows. Also, export is at or near a low, certainly out of the U.S. So, we have hit a bottom and will likely see some higher prices come early March, though maybe not as high as in early January when export pricing was $90 higher than it is today,” he said.

Special Events

SMU has several conferences and workshops in the works, and it’s easy to get more information. Our first Steel Hedging 201: Advanced Strategies & Execution will be held on Feb. 23-24. Our next Steel Hedging 101: Introduction to Managing Price Risk Workshop will be held on March 30-31. Our live and in-person SMU Steel Summit Conference will be held Aug. 23-25 at the Georgia International Convention Center in Atlanta. You can learn more by clicking the event.

As always, your business is truly appreciated by all of us here at Steel Market Update.

Tim Triplett, Executive Editor