Final Thoughts

I received a call earlier today from one of our readers who is also a consultant to companies who purchase flat rolled steel. He mentioned to me that there is some confusion with companies who think our index is the same as CRU, since we are owned by CRU. That belief is ill-advised and flat out incorrect. The SMU index is separate from CRU, and we have a completely different methodology. Due to the difference in methodology, there can sometimes be large variances between our index and that of CRU. Last week it was close to $50 per ton ($2.50/cwt). My recommendation for those of you who are trading futures or have contracts tied to the CRU index that you purchase both their product (which gets you access to their index) and ours.

Spot steel prices continue to climb, and we now anticipate they could challenge all-time highs on the SMU index, which reached $1,070 per ton ($53.50/cwt) in 2008. We learned this morning of one minimill quoting spot hot rolled at $51.50/cwt ($1,030 per ton). With scrap anticipated to move higher by possibly as much as $80 per gross ton, steel buyers should be prepared for more increases ahead.