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    February 24, 2022

    Hot Rolled Steel Futures: The Big Ripper

    Editor’s note: SMU contributor Bryan Tice is a partner at Metal Edge Partners, a firm engaged in Risk Management and Strategic Advisory. In this role, he and the firm design and execute risk management strategies for clients along with providing process and analytical support. Before joining Metal Edge Partners, Bryan held a variety of commercial leadership roles involving purchasing, sales, and risk management for Feralloy Corporation, Cargill Steel Service Centers and Plateplus Inc. You can learn more about Metal Edge at www.metaledgepartners.com. Bryan can be reached at Bryan@metaledgepartners.com.

    Exactly three weeks ago today, I wrote the HRC futures article entitled, “Opposing Forces” on day one of Russia’s invasion of Ukraine. Metal Edge Partners was fortunate to have been briefed by our Washington, D.C., contacts well in advance of the invasion of the potential risks of Russian aggression on the world order. Unfortunately, the devastation in Ukraine and the impact on the Ukrainian people over these long three weeks has exceeded most of our expectations. But their bravery and resolve have provided inspiration to the rest of the freedom-loving world.

    Latest in Prices

    Nucor aims to raise plate prices by $70/ton, opens December orderbook

    Nucor said on Friday morning it plans to increase plate prices by $70 per short ton (st) as it opens its December order book. The Charlotte, N.C.-based steelmaker said in a letter to customers that orders must be submitted by Nov. 27 to be considered. You can check out SMU’s Steel Mill Price Announcement Calendar to follow announced pricing moves. SMU’s price assessment for plate currently stands at $1,550/st on average, as of Tuesday, Nov. 10, up $55/st vs. the prior week.

    SMU’s ferrous scrap prices rise in November

    Ferrous scrap prices rose in November across all grades SMU tracks, though prices varied widely by region. “Marketwise, we saw disparate market movements between regions in the November trade, which wrapped up earlier this week,” one source told SMU. “It was a mixed bag, depending on the region and grade.” The source added that export pricing also rose over the course of last week, “but much less than the domestic market.”  Demand from US mills is strong and “there is probably more lift to be expected in the market between now and the January trade," he continued.

    SMU Survey: Steel mill negotiations remain rare as buyers face tight supply

    Only 5% of steel buyers surveyed by SMU this week said mills were willing to negotiate lower prices for new spot orders, suggesting mills retain substantial pricing leverage in a tight market. The share rose two percentage points from our previous survey two weeks ago but was nine points below the mid-October reading. This week's rate is just slightly higher than our previous survey when the negotiation rate fell to 3% — its lowest level since July 2021. Negotiation rates have trended downward all year as steel prices have continued to climb.

    SMU Price Ranges rise on tight supply, no signs of a year-end slowdown

    Sheet and plate prices continue to move higher on trends now familiar across the flat-rolled steel market: long lead times, limited availability, and domestic mills seemingly struggling to keep up with demand. Some market participants voiced concern about a potential slowdown in data center construction in the wake of sweeping Democratic victories at both the state and federal level as well as popular sentiment turning against the centers. But no one we contacted saw such concerns impacting the direction of prices over the short term. Commodity grades of HR are hard to find. And finding some items – whether it’s floor plate or 72-inch-wide coil – has become even more difficult, one steel buyer said.

    Nucor ups spot HR coil to $1,295/ton

    Nucor said on Monday, Nov. 9, that its consumer spot price (CSP) for hot-rolled (HR) coil will be $1,295 per short ton (st) this week, up $15/st from the prior week. The CSP for HR coil from California Steel Industries (CSI) on the West Coast will be $1,365/st, also up $15/st from last week. Nucor continues to offer lead times of three to five weeks, according to its letter to customers. You can track mill price announcements on our website. Steel Market Update (SMU) published a weekly price assessment on Tuesday, Nov. 3, showing HR coil prices averaging $1,350/st, up $45/st from the previous week. We will update our prices on the evening of Tuesday, Oct. 10.