Economy
SMU's January at a Glance
Written by Brett Linton
January 31, 2022
January marked the fifth consecutive month of declining steel prices, following a year-long streak of continuous price increases. Hot rolled prices declined $200 per ton throughout the month, with the SMU index averaging $1,335 per ton ($66.75 per cwt) as of Tuesday, Jan. 25. The SMU Price Momentum Indicator for sheet products remains at Lower since its mid-October adjustment.
January scrap prices were down $55-80 per ton from the month prior, with shredded scrap prices down from a multi-year high in December. Click here to view and compare prices using our interactive pricing tool.
Zinc and aluminum spot prices rose throughout the month to reach multi-month highs; zinc peaked at $1.67 per pound on Jan. 21 and aluminum peaked at $1.41 per pound on Jan. 20, the highest levels seen since the mid-October surge (excluding the occasional 2-5 day bumps commonly seen in aluminum spot prices).
The SMU Buyers Sentiment Index remained at a high level of optimism, ranging from +73 to +71 during the month. Viewed as a three-month moving average, buyers’ sentiment declined slightly to +73.67 in late-January.
Hot-rolled coil lead times continued to shrink, at 3.83 weeks as of late-January (territory last seen in the summer of 2020). The percentage of buyers reporting that mills are willing to negotiate on hot-rolled coil prices has been rising for the past five months, with the late-January datapoint indicating all mills are now willing to talk price to secure an order (only the third time we have seen 100% in 11+ years). A history of HRC lead times can been seen within our interactive pricing tool.
Key indicators of steel demand continue to remain positive, as has been the case for months. The AIA Billings Index indicated that construction activity has recovered for a full year now. The energy sector continues to improve, as do total U.S. steel imports, exports and apparent steel supply.
See the chart below for other key metrics in the month of January:
By Brett Linton, Brett@SteelMarketUpdate.com
Brett Linton
Read more from Brett LintonLatest in Economy
Steel exports recovered in May but still historically low
US steel exports rose 10% from April to May but remained low compared to recent years. This came just one month after exports fell to the lowest level recorded in nearly five years.
AISI: Raw steel production ticks up near recent high
The volume of raw steel produced by US mills inched higher last week, according to the American Iron and Steel Institute (AISI). After steadily increasing in April and May, domestic mill output stabilized in early June and has remained historically strong since.
Steel groups welcome passage of budget bill
Steel trade groups praised the passage of the Big Beautiful Bill (BBB) in Congress on Thursday.
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.