Advance/Decliner Index Climbs Higher. Our Advance/Decliner Index rose to 96% from 92% last week, for the highest level since June 2008. The strength was broad-based and for the first time since June 2008 both our China and ex-China indexes exceeded 90%. Our China index rose from 90% from 75% with the highest number of reported price increases since December, as steel prices run up ahead of raw material price increases.

Global Pricing Continues Upward; Tubular Prices Picking Up. The U.S. and China each posted nine price increases this week, followed by India with five, while Southeast Asia and Canada reported three hikes apiece. There were two price increases each for Turkey, Korea, and the Ukraine, while Japan, Italy, Indonesia, Vietnam, Greece, Saudi Arabia, the U.K., Mexico, Europe, Peru, Taiwan, and Singapore posted one apiece. There was a single price cut reported in China and one in Mexico. Flat-rolled products had 16 price increases, followed by rebar with eight, pipe with seven, and semi-finished with five price increases. Plate, wire rod, and merchant bar posted three price increases each, and beams had two. Rebar was the only product to show any retreat this week, with two price cuts.

Relative Domestic Prices Still Near All-Time Lows in March. Overall domestic relative domestic prices for flat-rolled have risen in March while plate prices are mixed and beam and bar prices are mainly down. U.S. plate prices have increased 5.9% and are up relative to Europe's 3.4% price increase but down vs. China where plate prices jumped 7.2%.

Domestic hot-rolled coil prices have jumped 10.3% already in March after rising similar amounts each month so far this year leaving domestic prices up sharply relative to Europe and China where prices have increased 1.2% and 4.4%, respectively, and up slightly vs. Japan where prices have climbed 9.3%. Recent reports of $250 to 300 a ton price increases in Japan likely will eclipse domestic prices significantly in the coming months.

Absolute rebar prices in the U.S. remain unchanged at $540 a ton in March and are down vs. China, Europe, and Japan where prices have picked up by 1.1%, 3.5%, and 10.3%, respectively, although recent surcharge plus base increases of $75 a ton on rebar will likely help reverse that trend next month. Domestic beam prices continue to be lethargic, coming in unchanged at $710 a ton so far in March and are down vs. China, Europe, and Japan where prices have moved up 1.3%, 2.2%, and 5.1%, respectively; a similar $50 a ton increase on beams will likely narrow the gap.

Outlook. Sheet prices continue to lead the upward trajectory resulting from a combination of bare-bones inventories with globally-driven pricing upticks exacerbated by the long-lead time of blast furnace startups creating a mini-shortage. Long and tubular products appear to be picking up the pace as well. Surging raw materials prices -- with both coal and iron coming in meaningfully higher than we'd expected -- and booming demand from emerging markets are pushing global steel prices to the highest level since pre-recession. We are becoming more convinced that this recovery has legs; we'll be watching restarts very closely in coming months.
Michelle Galanter Applebaum spent more than 20 years as a managing director at Salomon Brothers in New York and was the No. 1-rated steel analyst from 1988-2003, according to Institutional Investor magazine. In 2003, Ms. Applebaum formed Steel Market Intelligence, a 5-person Chicago-based equity research boutique providing advisory services to institutional investors. In addition to publishing 10-15 reports/week, Ms. Applebaum sponsors numerous CEO-level meetings for her investor clients during the year. She is regularly quoted on Bloomberg, Dow Jones, The New York Times and makes frequent appearances on CNBC and other news programs. Ms. Applebaum lives near Chicago with her husband, visiting children and 2 dogs.