SMU Data and Models
SMU's November at a glance
Written by David Schollaert
December 5, 2023
Steel prices continued to rally last month on the back of repeated mill price increases after tags reached a 2023 low of $645 per ton in late September. Hot-rolled coil (HRC) prices ended November at an average of $923 per ton ($46.15 per cwt), rising by $140 per ton during the month.
The SMU Price Momentum Indicator for sheet products continued pointing Higher throughout November after shifting from the Lower in September. The trend remained in place as tags kept rallying in response to repeated mill price hikes throughout November.
The Price Momentum Indicator on plate, which had been pointing lower since September, shifted to Higher largely in response to mill increase notices at the close of the month. Despite the improvement, signs of weakness due to waning demand persist.
Raw material prices have fluctuated somewhat but were again mostly sideways last month, except for scrap. Scrap prices improved on average in November, up between $15-30 per ton. Despite some movement mid-way through the month, zinc and aluminum spot prices were largely stable, remaining within historical levels. You can view and chart multiple products in greater detail using our interactive pricing tool here.
The SMU Steel Buyers Sentiment Index remained positive and continued to recover a bit, edging up during the month. Current Buyers Sentiment rose from +61 in October to +67 on average in November. Future Sentiment hovered at an average of roughly +71, down slightly from the prior month’s reading of +75.
Our Steel Buyers Sentiment 3MMA Index (measured as a three-month moving average) had been eroding over the past four months, falling to +58 in October, but recovered to +61 on average last month.
Hot rolled lead times averaged 6.93 weeks in November, up from 5.83 weeks the month prior. SMU expects lead times to hover around current levels, but market chatter suggests they could increase a bit more through December and into the first quarter of 2024 as inventory management takes precedence at the year-end. A history of HRC lead times can be found in our interactive pricing tool as well.
About 31% of HRC buyers reported in November that mills were willing to negotiate on prices, down noticeably from roughly 63% in October as mills drove prices higher.
Key indicators of steel demand are still showing some signs of weakness overall and are nowhere near the bullish levels some had shown earlier in the year. While there are some backlogs in the energy and construction sectors, and the UAW strike on Detroit’s “Big Three” automakers ended, demand in December and into early 2024 seems controlled, especially as buyers appear to be pushing back on a bit on the most recent round of mill price hikes.
See the chart below for other key metrics for November:
David Schollaert
Read more from David SchollaertLatest in SMU Data and Models
Steelmaking raw material prices ease in July
The majority of steelmaking raw material prices declined in June, following the same trend seen in May, according to SMU’s latest analysis.
SMU price ranges: HR declines moderate. Are we near a bottom?
SMU’s sheet price ranges slid again this week. But the declines were more pronounced on tandem products whereas prices for hot-rolled coil held roughly steady.
Some SMU Key Market Indicators improve, others remain near historic lows
SMU’s Key Market Indicators include data on the economy, raw materials, manufacturing, construction, and steel sheet and long products. They offer a snapshot of current sentiment and the near-term expected trajectory of the economy. All told, nine key indicators point lower, 16 are neutral, and 13 point higher. One thing worth noting: The nine indicators pointing lower are all lagging indicators. Many of those pointing upward are leading indicators.
SMU survey: Steel Buyers’ Sentiment Indices rebound
SMU’s Steel Buyers’ Sentiment Indices both saw improvement this week. Current sentiment ticked higher but remains near the four-year low seen earlier this month. Future Sentiment continues to indicate that buyers are optimistic for future business conditions.
SMU market survey results now available
The latest SMU market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Historical survey results are also available under that selection. If you need help accessing the survey results, or if your […]