I wrote last month that steel prices had stalled and that a bevy of indicators were suggesting that a fall might be around the corner.
I was cautious then not to make too much of a couple of weeks of SMU survey data. There is no reason to be cautious any longer. The warning signals we saw in April are now entrenched trends.
Pick your indicator: steel prices, lead times, or mill negotiations. All point to lower prices in the weeks ahead.
Let’s start with lead times and prices (see Figure 1). The big news recently is that hot-rolled coil (HRC) prices fell significantly below $1,400/ton ($70/cwt). Our average HRC price dropped to $1,365/ton in early and mid-May, down $115/ton (7.8%) from a post-Russia-invasion-of-Ukraine peak of $1,480/ton in mid to late April. (You can chart pricing information yourself using Steel Market Update’s interactive pricing tool, which can be found here.)
Included in that decline was a $75/ton week-over-week decline on May 10—the biggest drop we’ve seen since a $90/ton plunge in early February. Recall that prices in February were in freefall before the invasion of Ukraine sent them sharply upward again.
