Final Thoughts

Steel buyers believe benchmark hot rolled prices will peak at $1,350 to $1,400 per ton ($67.50/cwt-$70.00/cwt) based on our canvassing of the flat rolled and plate markets this week. We are seeing spot HRC orders at $1,300 per ton with a few buyers telling us there are offers up to $1,340 per ton from the domestic steel mills. There are mills whose order books are currently closed and are not offering spot tons, which is also helping to keep the range of pricing tight. Our range on HRC is shrinking, which leads me to believe, barring any “black swan” event, we may be very close to the peak of the market.

Prices remain high due to limitations in supply (same story over past six months). Steel buyers have been advising SMU that contract tons are limited by most mills to lower or median levels. Spot availability was limited in March and April mill order books and continues to be constrained in May and June mill order books. There are some mills offering more tons in May and June, but not enough to allow service centers to build inventories.