In a note to their union members the United Steelworkers Negotiating Committee advised they are not recommending a strike at this time. Read more ...

Consumer sentiment rose slightly from July to 74.3 in August. The current conditions index was at 88.7, up from 82.7 in July. The expectations index was down slightly from July’s 65.6 reading to 64.5 in August, which indicates confidence in the future slipped from last month. Inflation expectations are reported at 3.6% for the next year, up slightly from July.

Source: Reuter's/University of Michigan

The Chicago Purchasing Managers Index for August reported a modest monthly gain for the Business Barometer with a score of 53.0, even though the index dropped Read more ...

What will happen in the North American steel industry for the next year? What impact will volatility have on the economy, steel mills, service centers and the industry in general? Read more ...

Two of the top three steel mills and one of the largest iron ore companies in the United States are coming close to having their union contracts expire. At midnight on Saturday evening the United Steelworkers union contracts with U.S. Steel, ArcelorMittal USA and Cliffs Natural Resources, Inc. expire and the next step could well be a shutdown of the mill steelmaking and rolling facilities as well as the mines and pellet processing plants associated with the three companies Read more ...

Construction materials prices continue to slip, not staying in line with general inflation rates. The seasonally adjusted PPI for construction materials and components in July dropped Read more ...

United Steelworker and company negotiators for U.S. Steel and in separate negotiations ArcelorMittal continue to work on new contracts for both companies. Both contracts expire this weekend. Read more ...

Construction employment dropped in 165 out of 337 metro areas between July 2011 and July 2012, increased in 123 and was stagnant in 49, Read more ...

Written by John Packard:

I met with IHS Global Insight earlier this week and look forward to the two speakers from IHS who will be speaking at our 3rd Annual Steel Summit conference in Rosemont, IL (Chicago) on Monday, October 8th.

Just prior to our conference IHS Read more ...

U.S. home prices are increasing annually for the first time since summer of 2010, according to the latest S&P/Case-Shiller Home Price Indices. Read more ...

Written by: Joseph Reinmann, CEO Kataman Metals

The topic on everyone’s mind this week is the looming labor contract deadlines at both USS and ArcelorMittal.

Prices this week on the CME U.S. Midwest Hot Rolled futures contract remained stable for the balance of 2012 but drifted lower for calendar 2013 as traders and hedgers do not want to commit for 2013 until the outcome of the labor negotiations become clearer. Read more ...

The United Steelworkers Union (USW) representing the ArcelorMittal USA steel mills put out a new update to their membership on Friday morning. The latest memo is the second update from the negotiating committee to the AMUSA membership this week. SMU reported on the August 20th memo in our Tuesday evening edition of Steel Market Update Read more ...

Essar Steel Minnesota’s iron ore mining and taconite pellet plant near Nashwauk is now about halfway done with engineering and construction, Read more ...

The United Steelworkers (USW) has begun to answer questions for the workers at ArcelorMittal facilities regarding what happens on September 1st should the union fail to come to an agreement with the Company. Below is the latest update presented to AMUSA union workers this morning by the USW. The update is titled: “Q&A: Strikes, Lockouts, & Working Without a Contract” Read more ...

Existing home sales for July rose 2.3% monthly to a seasonally adjusted annual rate of 4.47 million, which is 10.4% higher than in July 2011. The national median home price was up 9.4% annually to $187,300 in July. Read more ...

Based on conversations Steel Market Update has had with steel buyers over the past two days we are beginning to see a slowdown in orders being placed with the domestic mills. We are also finding the domestic mills as being more willing to negotiate pricing this week compared to one week ago. We are not seeing any further extension of lead times and buyers appear to be content with their inventory levels – even if there is a strike at either ArcelorMittal or USS for a short period of time Read more ...

Written by: Andre Marshall, CEO Crunch Risk, LLC.

Financial Markets:

The markets all continue to climb in their positive trends, but do so despite fundamentals, and mostly due to drivers of circumstance. The stock market continues to climb on very little volume, and despite horrific PE’s historically at this point. Why? Money flows leaving government bonds, due to realization Read more ...

First: How our survey works

This past week Steel Market Update (SMU) conducted our mid-August steel market survey. We invited 700+ companies to participate in our survey which is focused on those participating in the flat rolled steel and related industries. Our desire is to concentrate our data collection efforts within the manufacturing Read more ...

CHICAGO, August 17, 2012 – CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of U.S. Midwest #1 Busheling Ferrous Scrap (AMM) futures to begin trading on September 10, subject to relevant regulatory approvals. This contract will be the first ferrous scrap futures contract available to U.S. steel industry participants, and will be listed by and subject to the rules of NYMEX Read more ...

Those actively buying and selling flat rolled steel (hot rolled, cold rolled, galvanized & Galvalume) continue to be optimistic about their company’s chances for success in both the current market as well as looking three to six months out into the future. Steel Market Update (SMU) measured our SMU Steel Buyers Sentiment Index at +34 based on the results of our mid-August steel market survey. The newest reading is +13 points higher than what we measured at the beginning of August and the most optimistic reading we have seen since early May 2012 Read more ...

The Philadelphia Federal Business Outlook Survey for August reported weak business conditions. Although the main diffusion index of current activity increased 6 points, the reading was still in negative territory at -7.1. Read more ...

Housing permits for July jumped 6.8% from June to an annual pace of 812,000 permits. Compared to July 2011, permits issued increased 29.5%. The single-family sector had 513,000 permits issued, up 4.5% from the previous month. Read more ...

Business conditions for manufacturing in the upstate area declined in August, according to the Empire State Manufacturing Survey. The main index, the general business conditions index, dropped below zero for the first time since October 2011. The index fell thirteen points to -5.9, Read more ...

The tone of the USW negotiating team update to the U.S. Steel union members is much more subdued than that of their ArcelorMittal counterparts. The negotiating committee working with U.S. Steel have identified retiree health care issues as being “the most complicated issue on the table this year.” This leads Steel Market Update (SMU) to believe the issues at USS may be quite different than those being faced by the AMUSA union members Read more ...

Negotiations continue between the United Steelworkers (USW) and ArcelorMittal USA as they strive to beat the midnight deadline on August 31st for a new contract. Over the past few weeks the union and management have been working on local issues. The big issues continue to remain unresolved. ArcelorMittal has taken a stance that their costs to do business in the United States are non-competitive with the other mills in North America. AMUSA has taken aim at the benefits package of their union workers as well as looking for flexibility in work hours as markets change and they are looking at eliminating retirement health care benefits for new hires (after September 1, 2012). With 17 days to go before the contract expires the company and union still have lots of work to accomplish Read more ...

This was an article published in Steel Market Update's Tuesday evening newsletter. For a 2-week free trial, click the free trial button below this post.

As of Tuesday evening – 24 Days to Go…

ArcelorMittal continued their “sell” of changes to variable costs as a way of finding an answer to negotiations between themselves and the USW. In their latest move, AMUSA posted a video of the restart of the Georgetown mill – which has a memorandum of understanding regarding salaries and bonus programs Read more ...

Steel Market Update is hosting another Steel 101: Introduction to Steelmaking & Market Fundamentals Workshop on September 20-21, 2012 in Ontario, California. Registration is now open for Steel 101, with only 9 days left for you to receive the Early Bird Discount (multiple discounts available). SMU believes this workshop is the premier industry training for those looking to better understand the steel making processes and steel market fundamentals. But, don’t take our word for it – see what our past attendees have to say Read more ...

Steel Market Update spoke with Charles J. Betters owner of CJ Betters Enterprises who confirmed his company was the “highest bidder” for the RG Steel Warren assets. Mr. Betters told SMU in a phone conversation this afternoon that his intention “is to maintain jobs” and restart the Warren mill which was idled when RG Steel filed for bankruptcy Read more ...

Steel Market Update (SMU) sources have identified two liquidators (acquisition & disposal companies) as the winning bidders for the assets of RG Steel Warren and Sparrows Point fully integrated steel mills Read more ...

United States Steel Corporation announced a new general manager for Great Lakes Works, a James R. Gray. The position went into affect August 1st as Read more ...

In a move which has to be considered as “in your face” AK Steel advised their customers of their intention to raise flat rolled spot prices by $30 per ton ($1.50/cwt). This is on top of the $40 per ton price increase announced by AK Steel on July 6th which was then followed up with another $40 per ton on July 27th. The three increases total $110 per ton ($5.50/cwt) since July 6th to today Read more ...

Written by: Andre Marshall, CEO Crunch Risk, LLC

NYMEX HR

On the back of mill price increases catching a bit - CRU printed $624 this Wednesday, which is up $7 from last week - and the scrap market rebounding back to its June levels, we have seen decent volume trade in HR this week. Read more ...

According to July’s ISM Manufacturing Index, economic activity in the manufacturing sector contracted for the second time since July 2009. However, the overall economy grew again, making July the 38th consecutive month. PMI was at 49.8, up slightly from June’s 49.7 reading. Since the reading is still below 50, Read more ...

Construction spending in June rose to a 2-1/2 year high at a seasonally adjusted annual rate of $842.1 billion after a 0.4% monthly gain, according to the U.S. Census Bureau of the Department of Commerce. Read more ...

Ternium S.A. announced its results for the second quarter and first half ended June 30, 2012. Net income was $125.1 million for the 2Q12, down $65.4 million from the previous quarter. Compared to 2Q11, net income in 2Q12 was $121.8 Read more ...

Registration for our 3rd Annual Steel Summit Conference is now open and available on our website. We have a tremendous group of speakers in this year’s program. The key from Steel Market Update perspective is to offer something whereby those attending learn something new which they can then take back to their company and incorporate into their decision making process. Read more ...