SMU Price Momentum Indicator Continues Record Run

For the past seven weeks, Steel Market Update (SMU) Price Momentum Indicator has been stuck in “Neutral” waiting for something to push prices in one direction or another. When we made the adjustment the week of November 27, 2012 from Higher to Neutral our SMU range for hot rolled coil was $620-$660 per ton (average of $640 per ton) and HRC has traded sideways (+/- $20/ton) for most of the past seven weeks. Our 7 week run is the longest we have had for a reading of Neutral since we started our SMU Price Momentum Indicator in 2009.

During the past two weeks, SMU began receiving data indicating the domestic mills were willing to break through the $600 per ton ($30.00/cwt) psychological barrier. A public break-through of the $600 level for medium sized service could take the numbers down to the mid-to-lower $500’s for larger service centers and would definitely move our SMU Price Momentum Indicator to Lower from Neutral.