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Steel Trends in a Turbulent Market: Responses from The Steel Market Update Market Survey Feb 22, 2010.
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Steel Trends in a Turbulent Market(responses from our SMU Market Survey Feb 22, 2010)
UBS Conference Call (Postponed) – February 26, 2010 John Packard, Publisher
John Packard – Steel Market Update
• 31 years actively selling flat rolled steel
• Newsletter developed for active buyers & sellers of flat rolled steel
• Prices – Momentum –Trends – Analysis
• SMU now in 2nd Year
February 2010 Forecast had 29.7% forecasting growth
End of Feb. ‘10 many companies failing to meet forecast – 43.5%
Failure to meet forecast comparison January ‘10 to February ‘10
• Fail to meet forecast in January – 38.7%
• Fail to meet forecast in February – 43.5% - with one week to go
73.1% of Mfg & SC are forecasting some growth for March 2010
Mfg inventories appear balanced
Mfg moving away from building inventory(reversal began in early February 2010 and continues)
Jan ‘10Feb ‘10
Service Center Inventories “balanced” (week of February 22, 2010)
Comparison of SC inventory build vs. reduction January to late February
January 2010 S.C. survey February 22, 2010 responses
Only 23.7% plan on increasing purchases over next 3 months
29% of companies surveyed reported they are buying foreign steel (mfg & sc combined)
More Mfg & SC plan on buying steel over the next few months
Buyers seeing foreign as an option
End of December 2009 – 21% End of February 2010 – 35%
SMU Buyers Sentiment continues pessimistic trend at -30% (as of 2/22/2010)
-100.0
-75.0
-50.0
-25.0
0.0
25.0
50.0
75.0
100.0
Steel Buyers Sentiment
Updated: 2/3/2010
SMU Buyers Sentiment with arrows indicating when price cycle changed
-100.0
-75.0
-50.0
-25.0
0.0
25.0
50.0
75.0
100.0
Steel Buyers Sentiment
Updated: 2/3/2010
Pricing Momentum Continues to Point to Higher Prices
•scrap
•Iron oreWhy? Cost
Increases
•weather
•Production problems
•Demand growth?
Why? Issues
While we worry about
supply growth
SMU Indexes 4 Products: HR, CR, Galvanized and Galvalume
0100200300400500600700800900
1000
Steel Market Update2009 Monthly Pricing Average
HRC
CRC
HDG
GLM
SMU Hot Roll IndexHigh, Low & Average (as of early February 2010)
300
350
400
450
500
550
600
650
7/1/2009 8/1/2009 9/1/2009 10/1/2009 11/1/2009 12/1/2009 1/1/2010 2/1/2010
Steel Market Update HRC July 2009 to Current
Low
High
Avg
$620$600$580
SMU Hot Roll Index tends to Lead CRU and other indexes
The UBS Conference call has been moved to Friday March 5, 2010
www.steelmarketupdate.com
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