SMU's June at a Glance

Written by David Schollaert

Steel prices continued to erode in June, a trend that began halfway through April. Hot-rolled coil (HRC) prices ended June at $875 per ton (43.75 per cwt) on average, falling by $115 per ton throughout the month.

The SMU Price Momentum Indicator for sheet products remained shifted to Neutral halfway through June, after turning Lower during May. The momentum change at the time was due to repeated mill price hikes, that have yet to be confirmed as taking hold, though they have caused prices to temporarily stop falling. Price Momentum on plate shifted to Neutral at the end of April, remaining at that position throughout May and June as the market has yet to determine a clear direction.

Raw material prices continued to slide lower last month, a trend that began in April. Scrap prices fell another $30-50 per gross ton on average from May. Zinc and aluminum spot prices also ticked lower throughout June but remained within historic levels. You can view and chart multiple products in greater detail using our interactive pricing tool here.

The SMU Buyers Sentiment Index remained positive but continued to trend lower during the month. Current Buyers Sentiment fluctuated up from +58 and +60, respectively, while Future Sentiment was hovering at an average of +63. Our Buyers Sentiment 3MMA Index (measured as a three-month moving average), which trended down in May, recovered slightly in June, moving up to +68.50 in June from +63.50 in May.

Hot rolled lead times averaged 4.74 weeks in June, down from 5.06 weeks the month prior. SMU expects lead times to edge up a bit in July, which has already started to occur so far, while the market attempts to establish a clearer direction. A history of HRC lead times can be found in our interactive pricing tool.

More than 93% of hot rolled buyers reported in June that mills were willing to negotiate on prices. Now, an average of 78% of the flat-rolled buyers we polled reported that mills were willing to talk price to secure an order, according to our latest survey from July 7, which is down from just about 85% in June.

Key indicators of steel demand remain positive overall, though nowhere near the bullish levels some had earlier in the year. And while the energy market and the construction sector continue to show signs of improvement, as does light-vehicle production, unemployment in those sectors continued to tick up in the jobs report from the US Department of Labor. Imports continued to increase through May, while export volumes and apparent steel supply remain healthy.

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

SMU May2023 at a Glance Tab1

By David Schollaert,

David Schollaert

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