SMU Price Momentum Indicator Adjusted to Neutral from Higher

Steel Market Update (SMU) has adjusted our Price Momentum Indicator from Higher to Neutral. This means we see steel market pricing at this moment as either in transition or moving sideways over the next 30 days. With ferrous scrap prices now weakening, lead times shortening and all of the available capacity back in the market the chances of steel prices remaining the same or moving slightly lower outweigh the chances that they will move higher from here. SMU last moved our Indicator from Neutral to Higher on October 31, 2013.

Market prices continue to be in a fairly tight range and the domestic mills are attempting to hold the line.  Even so, we are starting to see some cracks in the armor as lead times – especially on hot rolled coils – are starting to pull back. We have heard of a number of mills looking for business – not giving it away mind you – but looking for orders on hot rolled, cold rolled and coated products. At the same time one of the coating mills was complaining to Steel Market Update earlier today of the impact foreign steel was having on their order book.