SMU Data and Models
May 15, 2014
SMU Price Momentum Indicator Adjusted to Neutral
Written by John Packard
On Wednesday, Steel Market Update adjusted our SMU Price Momentum Indicator to Neutral from Higher.
Our Price Momentum Indicator had been pointing toward Higher prices ever since March 25, 2014. Over the past seven weeks, hot rolled coil prices advanced from $630 to a high of $685 per ton based on the Steel Market Update average HRC price which we publish on a weekly basis. SMU first hit the $685 number on May 6th and remained at that level again this week. Based on various factors outlined below, SMU is of the opinion that HRC average prices will not move any more than a dollar or two higher from here (if at all). We have moved our Momentum Indicator to Neutral rather than Lower as we have not yet seen price offers outside of our HRC price range which is currently $670-$700 per ton. We are aware of minor adjustments ($10 per ton) being made from some of the mills who were offering pricing at the upper levels of our range.
