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Comparing U.S. Steel’s Average Selling Prices with Its Peers

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Average selling prices

Steel companies’ earnings are sensitive to changes in steel prices. Spot HRC (or hot roll coil) prices, which are often seen as a benchmark for other product categories, witnessed huge swings in 4Q16.

According to the data compiled by Metal Bulletin, US HRC prices fell to $470 per ton levels in October 2016. However, we saw a significant recovery in prices in November after Trump’s election, and spot HRC prices reached $540 per ton levels during the month.

Steel prices continued their upward trend in December, and spot HRC prices ended 2016 in the ballpark of $600 per ton. In this article, we’ll see how volatile steel prices impacted different steel companies’ 4Q16 average selling prices (or ASP).

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4Q16 ASP

  • U.S. Steel Corporation (X) reported ASP of $634 per ton in 4Q16, which is 4.4% lower compared to the sequential quarter.
  • Nucor’s (NUE) 4Q16 ASP fell 6.7% compared to 3Q16.
  • Steel Dynamics (STLD) reported an 8.1% sequential drop in its 4Q16 ASP.
  • ArcelorMittal’s (MT) 4Q16 ASP fell 2.0% compared to 3Q16. ArcelorMittal’s 4Q16 ASP fell less than some of the other steel companies because of the company’s Europe operations.
  • MT’s Europe 4Q16 ASP was similar to 3Q16 while the company’s NAFTA[1. North America Free Trade Agreement] segment reported a 4.7% sequential decline in its 4Q16 ASP.
  • AK Steel’s (AKS) 4Q16 steel prices fell 1.8% compared to 3Q16. The company reported its smallest decline in its 4Q16 ASP compared to the other companies that we’re covering in this series. This could be attributed to its decision to cut its exposure to low-priced commodity-grade spot shipments.

In the next article, we’ll analyze the different factors that could drive steel companies’ 2017 ASP.

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