SMU's July at a Glance

Written by Brett Linton

Steel prices continued to fall in each week of July, following declines in May and June. Hot rolled prices were $955 per ton ($49.75 per cwt) the first week of July, slipping between $35 and $45 per ton each week to reach $840 per ton as of last Tuesday. The SMU Price Momentum Indicator for all products remains at Lower since our May adjustment, meaning we expect prices to decline over the next 30 days.

Raw material prices declined further from April’s historical highs. Scrap prices saw triple-digit declines in July, with busheling falling to $505 per gross ton, shred to $440 per gross ton, and HMS to $360 per gross ton. Scrap prices are now similar to those seen in early 2021. SMU sources expect scrap prices to decline further in August. Click here to view and compare prices using our interactive pricing tool.

Zinc spot prices were steady for most of July but began rising the last few days of the month. Per Kitco, zinc prices hovered between $1.35-1.43 per pound from July 1 through July 27. Last Thursday the spot price rose to $1.47 per pound, rising again Friday to $1.52 per pound. The spot price as of Tuesday afternoon was $1.54 per pound.

Aluminum spot prices fluctuated between $1.15–1.22 per pound throughout July, according to Kitco. Aluminum prices are currently on the low-side compared to what we’ve seen over the past year.

The SMU Buyers Sentiment Index remains positive but has been easing since April, with optimism declining from +60 in early July to +43 at the end of the month. Sentiment is now at the lowest level since August 2020. Viewed as a three-month moving average, buyers’ sentiment fell to +63.33 through the end of the month. Our Future Buyers Sentiment Index has also shown signs of cracks emerging: the index slipped from +54 to +43 as of late July, also the lowest level recorded since August 2020.

Hot rolled lead times peaked in mid-April at 5.8 weeks. They have declined each month since, averaging 4.0 weeks in July. The percentage of buyers reporting that mills are willing to negotiate on prices remains high. Through the end of July, 89–94% of flat-rolled buyers reported that mills were willing to talk price to secure an order. A history of HRC lead times can been found within our interactive pricing tool.

Key indicators of steel demand remained positive through May and June data. Energy and automotive sectors continue to recover. Construction activity slowed in June but remains strong. Import and export volumes were down slightly in May compared to recent months, but apparent steel supply remains healthy at 9.5 million tons.

See the chart below for other key metrics in the month of July:

July at a glance

By Brett Linton,

Brett Linton

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