CRU is delighted to announce the establishment of a wholly foreign-owned enterprise (WFOE) named CRU...
We wanted to confirm our belief that CRU’s hot-rolled coil price – published every Wednesday in CRU’s Steel Sheet Products Monitor, and known by many as ‘The CRU’ – is the leading steel benchmark in the US market.
To that end, we commissioned independent market research, interviewing 200 US steel buyers/sellers. The research was done by an independent market research company. CRU customer lists were not used – individuals were chosen randomly to form a statistically-valid cross section of the US steel industry covering representative samples of companies through the supply chain (mills, service centres, fabricators, pipe and tube companies, processors and end users) and across different industries (automotive, consumer goods, construction and so on). The other criteria was that they had authority to buy and sell steel.
Research Manager Chris Houlden said: “The Mid West Hot Rolled Coil steel price which is the established index, used by 85% of North American buyers and sellers and used as a reference price on the CME.”
They were not told who the research was being conducted for. They were asked a series of questions about their use of price benchmarks, their criteria for judging the quality of a benchmark and how their use has or might change.
Which price provider does your company use when buying and selling steel sheet?
CRU was used by 85% of respondents. Only 43% named the next most popular provider. In fact, CRU was named more often than the next two providers put together across the supply chain and industry sectors. Of those who used a steel benchmark to do business, almost half relied solely on the CRU price, a testimony to the trust that people have in it. Only about one in 10 respondents relied solely % on another provider.
Do you reply on one benchmark or more than one – and which?
People change their benchmark rarely, less than 10% had changed in the past two years. Most of these had moved from another provider to CRU, only a single individual had moved away from CRU during that time.
Interviewees who used a benchmark for buying and selling steel were asked what frequency of price they preferred. About 70% said they preferred weekly prices – the remainder were equally split between monthly and daily. It is CRU’s view that different markets suit different frequencies based on liquidity. A price that is more frequent than the market wants only risks creating false volatility. CRU publishes more than 500 price assessments across mining, metals and fertilizers and has a range of weekly, bi-weekly and monthly frequencies.
Interviewees were very clear about the factors they use to judge the robustness of a benchmark. The three most important factors, rated by at least 80% of people as quite/very important were:
- Index seen as standard and established
- Freely available and transparent methodology
- A wide sample of buyers and sellers
It is clear from the research that “The CRU” is the “standard and established” index, a reflection of the importance we place on the strength of our methodology. Our price is trusted because that methodology is based on collecting a wide and representative sample of transactional data and applying expert analytical judgement to it. The involvement of analysts was rated as quite/very important by three-quarters of interviewees. In contrast only 20% thought the same about the involvement of journalists.
At CRU, our company culture is a fundamental part of how we work day to...
By 2030, aluminium demand from electric vehicles (EVs) will near ten million tonnes, a ten-fold...
To what extent has the economic outlook changed and what are the implications? How does...