Economy
SMU's April At-a-Glance
Written by Brett Linton
May 4, 2021
Limited supply and strong demand continued to push steel prices higher throughout April, now the eighth consecutive month in which prices have increased. Hot rolled steel prices increased an average of $25 per ton each week, reaching $1,440 per ton by the end of April, exceeding any historical price by far. The SMU Price Momentum Indicator has remained unchanged since the August 2020 adjustment to higher, indicating prices are expected to rise further in the short term.
April scrap prices remained relatively stable versus March, down $5 for HMS and down $20 per ton for shredded and busheling scrap. Click here to view and compare prices within our interactive pricing tool.
Zinc prices picked up speed in the last week of the month, climbing to a two-year high of $1.3186 per pound as of April 30. Aluminum prices also finished the month strong, reaching a multi-year high of $1.1014 per pound. Aluminum prices have risen steadily since May 2020, and are approaching levels not seen in nearly three years. Click here to see a graphic on zinc prices and click here to see aluminum prices.
The SMU Buyers Sentiment Index continues to show a high level of optimism, ending the month at +73. The three-month moving average was +69.83 as of last Thursday, the highest reading since March 2018.
Hot rolled lead times extended further through the end of April, reaching a new record of 9.81 weeks, while the percentage of buyers reporting mills willing to negotiate on HR prices remained miniscule all month.
Key indicators of steel demand overall remained positive, as they have for recent months. The ISM Manufacturing Index indicated further expansion in the economy for the 11th consecutive month, and the March AIA Billings Index, a measure of construction activity, recovered for the third month in a row. In the energy sector, the active drill rig count increased 6% throughout the month. Total U.S. steel imports and apparent steel supply both have shown gains in recent months.
See the chart below for other key metrics in the month of April:
By Brett Linton, Brett@SteelMarketUpdate.com
Brett Linton
Read more from Brett LintonLatest in Economy
Industry groups praise Senate for passing tax and budget bill
The Steel Manufacturers Association and the American Iron and Steel Institute applauded the tax provisions included in the Senate's tax and budget reconciliation bill.
Chicago PMI dips 0.1 points in June
The Chicago Purchasing Managers Index (PMI) slipped 0.1 points to 40.4 points, in June.
Multi-family pullback drives housing starts to 5-year low in May
US housing starts tumbled in May to a five-year low, according to figures recently released by the US Census Bureau.
Architecture firms still struggling, ABI data shows
Architecture firms reported a modest improvement in billings through May, yet business conditions remained soft, according to the latest Architecture Billings Index (ABI) release from the American Institute of Architects (AIA) and Deltek.
Manufacturing in New York state contracts again
However, companies are growing more optimistic about the future.