Final Thoughts

Steel Market Update’s check of the market this week puts the current price for hot rolled at a new record high of $1,150 per ton ($57.50/cwt). But with increases of just $10 per ton in the last couple weeks, the upward momentum in pricing appears to be slowing.

SMU keeps a close eye on the average lead times for spot orders from the mills. Lead times are a leading indicator of demand—the longer the lead time, the busier the mill. When the lead times start to shorten, that suggests activity at the mills is easing, with prices likely to follow. The average HR lead time as measured by SMU saw a small dip in last week’s survey to 7.57 weeks. The beginning of a downtrend? That does not appear to be the case, at least not yet. SMU’s HR lead time has moved back up to 7.96 weeks, according to preliminary data. A lead time of nearly eight weeks is almost twice as long as the historical average and will take some time to normalize even after the market begins to correct.