SMU Price Ranges & Indices: Is the Next Stop $600 Hot Rolled?

What makes indexing flat rolled steel prices so difficult right now is you have steel mills quoting lead times that may be in May, June or even July for the same product. A hot rolled order placed on SDI last week is actually being produced at the same time as one placed on AK Steel a month or two ago. The base prices will be radically different when the steel is produced and shipped. OK, so we have to look at “new” orders and offers that are coming out of the domestic mills right now. Well, the other issue we have is a number of mills have opened and closed their order books, some are waiting for the new scrap prices to be announced for May while others may be taking spot orders but only on an allocated basis. This has created a very frustrated group of steel buyers.

The prices below are a snapshot in time taken with a grain of salt. There are offers to sell hot rolled as high as $580 per ton and we don’t think it unreasonable for those offers to go up to, or exceed, $600 per ton after the next round of price increases (which are expected by the end of next week). On the coated front we were told today that AK Steel had base price offers for spot out there at $38.00/cwt and NLMK USA was reported to have $37.00/cwt base numbers out there. The question is how long before coated base price levels reach the magical $40.00/cwt level (which seems to be a historical sticking point – not impossible to broach as we found out during 2008).