Final Thoughts

When I started Steel Market Update in August 2008 and I began to look at steel prices, I did so from a different viewpoint than the indexes that already existed. Having just completed a 31-year career in selling flat rolled steel, I believed what was most important for steel buyers to understand was the range of prices that exist in the marketplace. To me the range was more important than “the number” that people were referencing from other indexes. I understood the market likes to have “the number” to talk about, and so I created a simple formula – take the low end of the range, add it to the high end, and divide by two. There has never been any “weighting” to our numbers in one direction or the other. Our index was never meant to be used by the financial community or in contracts. Rather, it exists to provide more information to the industry (steel buyers in particular) and assist buyers and sellers of steel as they make future buying and selling decisions.

However, part of our process is to identify “price momentum” as a way of assisting the market in its understanding of the numbers we provide. Right now, our Price Momentum Indicator is pointing toward higher prices on all flat rolled and steel plate products over the next 30 days.