SMU Data and Models
February 28, 2017
SMU Price Momentum Indicator Moved to Higher from Neutral
Written by John Packard
Steel Market Update (SMU) has adjusted our Price Momentum Indicator to reference spot prices as moving higher from this point over the next 30 days. Our decision to move our indicator is due to the continued high prices for steel mill inputs, such as 62% Fe iron ore fines in China being sold at $91.50/dmt CFR Tianjin Port, China. We also believe ferrous scrap prices will be +$30 per gross ton or higher once negotiations have been concluded with the domestic steel mills. The higher input costs will help motivate the mill commercial departments to hold the line or to increase flat rolled steel prices.
We are being cautious about our change from Neutral to Higher as we are unsure whether there is enough wind at the sails for the steel mills to continue moving prices above the $640 per ton hot rolled and $850-$860 per ton cold rolled and coated that we are seeing as the high end of the offers in the market currently.
