Six Year Trend Analysis on Steel Pricing and 10 Year History on AMM HRC Steel Sheet Index

The six year trend analysis on HRC reviews the 2004 and 2008 steel pricing bubbles.
The analysis for both the 6 year and the 10 year analysis show the cyclical price fluctuations that were based on quarterly supply and demand activity.
Steel price activity has been mainly influenced by recent scrap, iron ore coking coal prices due to the bad weather and flooding in Australia, but without an increase in demand these price increases will be short lived.
From an economic recovery view point we see upward trends in several areas including manufacturing but the residential and commercial building sectors are still struggling. I believe this struggle will continue to impact steel pricing well into 2012 and 2013.
Form the trend we see increases in steel pricing through Q1 and partial of Q2 2011 with a down turn in pricing as early as April.
The down turn may be delayed until May/June due to the flooding in Australia

Major Points on Steel Trends

HRC steel pricing follows a roller coaster pattern
There were two major price bubbles in the last six years (2004 & 2008) with increasing prices averages increasing after prices stabilized.
The steel contract lock-in strategy allows you to monitor the market trend and lock-in on the down turn of pricing.
The length of the contract depends on the market condition. If pricing forecast are trending down the contract will be shorter if pricing forecast are increasing the contracts will be longer.
Normal contract lengths are completed in quarters but depending on market condition the range can be one month to six months and in special cases 12 months.