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Essar Steel Algoma: Strike Set for Local 2724 but Production will Continue

Wed, 28 Jul 2010 19:15:36 -0400

Earlier this month the members of United Steel Workers (USW) Local 2724 voted to strike August 1, 2010 should they not reach a collective agreement with Essar Steel Algoma Read more ...

The Direction of Flat Rolled and Other Steel Prices from Here

Wed, 28 Jul 2010 12:24:18 -0400

Steel Market Update asked one of our contributing writers, Peter Brebach, CEO of Iron Angels of Colorado, to speak to the steel market and the trend he believes is developing in the market. Steel Market Update, at this moment, continues to forecast a declining trend/momentum in the flat rolled steel market although we do expect the declines to be more modest from this point Read more ...

U. S. Steel Reports 2nd Quarter 2010 Loss

Tue, 27 Jul 2010 13:25:31 -0400

United States Steel (USS) reporting a net loss of $25 million, or $.17 per diluted share of which $96 million or $.62 per diluted share was foreign currency remeasurement losses on intercompany loans. Net sales were $4.7 billion on shipments of 5.9 million tons which represented an increase of 9% from 1st Quarter 2010 Read more ...

California Steel Industries to Speak at SMU Conference in October

Mon, 26 Jul 2010 13:16:39 -0400

Steel Market Update is pleased to announce Mr. Ricardo Bernardes; California Steel Industries (CSI) Executive Vice President of Commercial will be a participant in our first steel conference to be held in Las Vegas on October 19th. We believe the addition of Mr. Bernardes and California Steel will help us provide a more balance look at the steel industry from coast to coast. California Steel is very much a player in the construction markets west of the Rockies. Although, SMU believes many may be surprised at the geographical reach CSI has here in North America Read more ...

Metals USA CEO says domestic mills "...are the problem right here in America, right now"

Mon, 26 Jul 2010 01:15:39 -0400

Metals USA, one of the larger flat rolled steel service center groups in North America, announced their second quarter earnings for 2010 on Tuesday of this week. The company recorded operating income during the quarter of $17.4 million compared to $12.7 million in the first quarter 2010.

The company’s colorful CEO, C. Lourenco Goncalves, has shown in the past he has a way with words and tends to speak directly to issues. The conference call with analysts was once again filled with “color” about the steel business and economy. SMU will try to go past the “catch phrases” and presented a more complete picture of the call and the various flat rolled pricing, inventory and market comments made by the company (mostly Mr. Goncalves) during

the call.

The following information is being taken directly from the transcript of the Metals USA conference call and we have attempted to be as complete as possible on any specific subject they addressed. We are not reproducing the entire transcript.

“…same volume of business working out of fewer tons of inventory”

One of the first items which hit our eye during the opening remarks by Mr. Goncalves was a reference to the company’s ability to “…do the same volume of business working out of fewer tons of inventory.” SMU believes this is not isolated to Metals USA but perhaps one of the new realities of the service center business models going forward. The old 3 month standard inventory levels and four or less turns per year is outdated and, as was proven in late 2008 through the first half 2009, potentially dangerous.

Mr. Gonsalves puts his own twist to the tale with the following:

“Let me now comment on market conditions. Given the current environment, I believe its most instructive to look at sequential results to assess progress. Metals USA shipments increased 9% in the second quarter 2010, over first quarter 2010 which we expected to be in line with the overall service center industry. We remain convinced that 2010 is a transition year and that we will return to more normalized environment in 2011. We are experiencing decent and growing demand in almost all end-markets with exception of non-residential construction. Non-risk is not out, but it certainly remains down and will continue to be for the foreseeable future. However, other end markets have been performing well and should continue to improve in Q3 and beyond.

We have experienced year-over-year shipment growth of almost 20%. In any other year, 20% year-over-year growth would be great. But I have to admit that at the beginning of the year, I was expecting year-over-year growth to reach into the mid 20s. What’s frustrating is the fact that the industrial economy is doing better than perceived by the media and could have been supporting 25 plus percent of steel consumption growth. Unfortunately, several issues are acting as barriers to higher steel consumption in the U.S.

First, MUSA have not given steel consumers the confidence that they will keep prices stable. Let’s face it. If a steel buyer thinks the price is going to be lower tomorrow, he or she will not buy today. Complicating this effect is the behavior of most service centers. With an inventory position exposed to price drops, service center will keep inventories as low as possible to mitigate the impact of adverse pricing trends. Metal USA is no exception on that.

Second, I think the average business of others operating mentality has been seriously affected by the economic crisis of 2009. By and large, end users no longer trust their own perceptions and are overly cautious to avoid the conditions they found themselves in 12 to 18 months ago. One very curious behavior that I have noted repeatedly is that business managers no longer trust their own order book and continue to buy fewer tons than they would buy two or three years ago for the same level of orders on hand.

Along similar lines, the average business manager has become pessimistic by default, and is reacting too severely to global news without determining if the news will really affect his or her business. In fact, they just assume it will. For instance, does the credit problem with Greece really reach manufacturing [inaudible] America? I believe that people have lost their ability to assess what conditions are really influence their businesses and what are not. Consequently, they overreact to all inputs…”

“…cost push will be a key driver of higher prices for the foreseeable future”

“Turning my comments toward pricing. I will continue to be an outspoken proponent that cost push will be a key driver of higher prices for the foreseeable future. Effective July 1, 2010, world prices for iron ore increased 25%. This view forces one of two possible outcomes. Finished products prices will either be increased to recoup costs or mills, we’ve experienced compressed margins. There is no alternative.

For much of the first half of 2010, prices have trended higher for this reason. Recently, prices have become unstable. Some may interpret this as an indication that a peak has occurred. I am less inclined to think like that. Too many pundits focus on installed capacity utilization as a price driver. Historically, I think that was a reasonable assumption. However in this consolidated environment, installed capacity utilization is less relevant. What’s more important now is the order book in front of furnaces that are operating. Sufficiently sized order books allow furnaces to operate in an efficient manner and optimize conversion costs. We have seen mills raise prices with low installed capacity utilization, but with good order books on hand.”

Q – Bruce Klein: Two things just on the working capital. I guess what do you attribute, I know it rose a lot less, but typical given the shipments which is great news. What do you attribute that to I guess and how sustainable is it? And secondly prices has soften some, they are still softening in your view and when do you think it would sort of bottom out?

A – Lourenco Goncalves: Bruce, let me start with pricing. During Q2, prices really softened more than we would like to see and especially at the end of the quarter. And that was motivated by, in my opinion, by the inability of the markets to realize that the international prices will receive a very strong pressure during Q3, sometime during Q3. I don’t know exactly when the new iron ore prices will kick in and will be really translated into higher costs for the integrated mills. But you make no mistake, POSCO, Nippon Steel, Thyssenkrupp, Corus, ArcelorMittal all these guys will pay higher price for our work and that will translate in higher costs, same thing is happening with coking coal.

So if the mills will continue to allow prices to deteriorate or even if they do not allow price to go up, what we are going to see will be a repeat of the dire straits that the industry was in 10 years ago. I don’t believe that the mills will allow that to happen. And we, as service centers, we have much more protection against this type of things than the mills. For them its costs, best costs or not best costs, profit or loss. In our case, by playing with the inventories and making the inventories is more than enough to mitigate the impact on pricing we can survive. So we may not deliver great profit but we still be profitable. So it’s a decision that the mills we have to make, how they’re going to treat their cost pressure because the cost pressure is real. What was the first question?

Acquisitions

A – Lourenco Goncalves: We continue to pursue acquisitions. Everything that I said during the road show, we are doing everything that we committed with we are performing. I told the potential investors during the road show that we would do one or two acquisitions this year. We closed the first one before midyear. It looks like we have been public for a long time, but I have just finished the first quarter as a public company. So one thing that investors need to understand is that things take time. So we will continue to pursue acquisitions, it’s a good time to buy. The business will not go away for good in the United States; it’s just a shaky time, so we’ll continue to take advantage.

Third Quarter Improvements

Q – Brett Levy: And then the last one is just sort of a bet [ph] for a little bit more granularity. It looks as if steel price is kind of across the board, kind of coming down from June to July to August, volumes also to some extent, what is moving up, let’s say, third quarter look like it might be stronger?

A – Robert McPherson: Volume.

Q – Brett Levy: Volume.

A – Robert McPherson: Volume.

A – Lourenco Goncalves: We are at this point enjoying better volumes than we were during the latter part of the second quarter. So volumes are picking up even in a month like July that is normally not a month in which we see volumes picking up.

Q – Brett Levy: And is there a particular area where the volumes are stronger, particularly stronger in, I don’t know shape or something like that?

A – Lourenco Goncalves: That’s too early in the quarter to give you this type of detailed granularity, if you will. So we’re seeing an overall trend of volumes increasing in then though we’ll stay at this for the time being, Brett.

Selling Prices

Q: Hi. This is Adam Rahn [ph] speaking on behalf of Sal Tharani. We had a quick question, hot rolled prices going up 16% quarter-over-quarter from the first to the second quarter. And we have average selling price few guys up 6%. We understand that there is a lag there, but we were wondering if you could provide some color as to whether there is going to be a lag if prices go down in the third quarter?

A – Lourenco Goncalves: No. Next question.

Domestic Mills are the Problem “…right here in America, right now”

Q – Phil Gibbs: Hey guys. I just had a quick question on the gross margins in the second quarter; I think we’re expecting a bit more. Was that more competitive or was that mix and how are the margins progressing through the quarter, on a month-on-month if you could give any color on that?

A – Lourenco Goncalves: Phil, you are right and we were expecting a higher gross margins as well. The problem is that in an environment in which the mills only talk prices to talk prices down in which that we are not seeing enough business to support everybody’s ability to make a boatload of money, we have to be competitive. So in Q2 we have to sacrifice gross margins in order to continue to perform well in terms of volume and we did just that. We would love to have higher gross margins, but without mill support that is next to impossible. The good news is that the mills are putting themselves in a position that if they continue to act the way they’re acting, a few of them will go out of business. We have seen that before, I don’t know how long we’ll follow this business, but I have been in this business long enough to know that if you behave like LTV, you are LTV. If you behave like [inaudible], you are [inaudible], no matter if you have a new name, no matter if you have a new owner, if you’re back to the practices of the past you are [inaudible] on the water. So the mills need to change or they will be gone, and then it’s a new start, it’s a new beginning. Everybody will be reborn and that’s great, that’s fantastic.

Q – Phil Gibbs: And Lourenco, we’ve seen supply of carbon still on a weekly basis track around 17, a little higher than that, 1.7 million tons, you think that needs to come in a little bit as we move into the second half of the year to stabilize prices to get them moving in the right direction, should we see some supply come off?

A – Lourenco Goncalves: Maybe, maybe. There are some mills in the United States that should be shut down long ago, but people keep believing in stories like when we saw old mills that were absolutely outdated combined with service centers, then being sold to a mill and then the mill thought that they had the best thing in the world and all of a sudden, they’d sell the service centers and keep the mills. So the old mills are in still active. So we need to learn with the past, instead of continue to make the same mistake, just with the new cover. It doesn’t really fly. So yeah, we need and keep the mills. So the old mills are in still active. So we need to learn with the past, instead of continue to make the same mistake, just with the new cover. It doesn’t really fly. So yeah, we need to some capacity to go out here. But we are more concerned about calling Chinese CapEx to be shut down as if it would change a bit in the United States. But we keep, especially the mills continue to really push China to reduce their installed capacity. Why they’re going to reduce their installed capacity right here in America where we have a clear problem of over capacity? Because it’s much easier to blame the Chinese because they know that that will take their tension out of where the problems are. The problem is right here in America. We have more capacity in America than we need, right here, right now.

It’s time for the mills to stop calling China the problem. They are the problem right here in America, right now. to some capacity to go out here. But we are more concerned about calling Chinese CapEx to be shut down as if it would change a bit in the United States. But we keep, especially the mills continue to really push China to reduce their installed capacity. Why they’re going to reduce their installed capacity right here in America where we have a clear problem of over capacity? Because it’s much easier to blame the Chinese because they know that that will take their tension out of where the problems are. The problem is right here in America. We have more capacity in America than we need, right here, right now. It’s time for the mills to stop calling China the problem. They are the problem right here in America, right now.

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Nucor Reports Net Earnings of $91 Million in 2nd Quarter

Thu, 22 Jul 2010 13:44:35 -0400

Nucor Corporation reported consolidated net earnings of $91.0 million, or $.29 per diluted share, for the second quarter 2010 on sales of $4.20 billion. Nucor earned almost two-thirds less during the first quarter when they reported earnings of $31.0 million when they sold $3.65 billion Read more ...

Essar Steel Algoma Reaches Tentative Deal with One of their Two Unions

Wed, 21 Jul 2010 23:05:53 -0400

Essar Steel Algoma announced late on Wednesday they have reached a tentative agreement with one of their two unions – USW Local 2251. USW Local 2251 represents the hourly workers at the mill and an agreement was believed inevitable after the union leaders did not ask for a strike authorization vote Read more ...

Steel Dynamics "kind of" Believes Flat Rolled Prices have Bottomed...

Wed, 21 Jul 2010 14:57:50 -0400

Steel Dynamics (SDI) announced earnings and discussed their business in a conference call with analysts on Tuesday of this week. What caught the attention of the press was "part" of one of Keith Busse statements regarding flat rolled steel pricing Read more ...

MSCI Data Shows Flat Rolled Inventories Increased by 377,200 Tons in June

Wed, 21 Jul 2010 11:43:44 -0400

The Metal Service Center Institute (MSCI) reported domestic service center shipment and inventory data for June this morning. The key data being flat rolled steel inventories increased by 377,200 tons and the 4,497,500 tons are the most seen since February 2009. Flat rolled inventories have been steadily growing since August 2009 (10 straight months) Read more ...

MMK Foregoes Ohio Flat Rolled Steel Mill

Tue, 20 Jul 2010 20:05:28 -0400

Reports last week confirmed that Magnitogorsk Iron & Steel Works (MMK) will not be proceeding with their 2007 plans to build a steel mill in Ohio Read more ...

Steel Dynamics Reports Earnings - Flat Rolled Ran at 80% of Capacity in 2Q

Tue, 20 Jul 2010 12:20:52 -0400

Steel Dynamics, Inc. (SDI) announced earnings of $49 million for the second quarter 2010 ($.22 per diluted share) which is $16 million lower than 1Q 2010 earnings but, an improvement over 2Q earnings in 2009 when the company had a loss of $16 million. The company shipped 1.3 million tons of steel products during the quarter of which 815,000 tons were flat rolled. Flat rolled accounted for 64 percent of second quarter steel operations shipments Read more ...

China Finds Subsidies in U.S. Steel Industry

Mon, 19 Jul 2010 01:15:55 -0400

SMU found an interesting article in the most recent American Institute for International Steel (AIIS) newsletter which came out today. In this month’s issue AIIS takes a look at the results of the Chinese dumping suit against AK Steel and Allegheny Ludlum who were accused of dumping grain-oriented electrical steel. What should be of interest to our readers is the existences of U.S. subsidies which we take for granted but are considered by the international community as “protectionist Read more ...

U.S. Steel Clairton B Battery Status & Update on Accident Victims

Thu, 15 Jul 2010 19:57:09 -0400

On Wednesday morning there was an explosion at the U.S. Steel Clairton Coke Plant. The explosion shut down the B Battery coke ovens. Steel Market Update has remained in contact with U.S. Steel in order to get the most up-to-date information for our members and those who visit our SMU website Read more ...

Update on U.S. Steel Explosion at Clairton Works

Thu, 15 Jul 2010 01:01:19 -0400

On Wednesday morning there was an explosion at the “B” Battery at the U.S. Steel Clairton coke plant. The explosion injured twenty workers who were on site at the time Read more ...

U.S. Steel Clairton Works Suffers Blast at Coke Batteries

Wed, 14 Jul 2010 18:05:31 -0400

There has been an explosion at the “B” Battery at the U.S. Steel Clairton coke plant. The explosion has injured a number of workers who were on site at the time. The exact number is not yet known and there are various industry reports quoting specifics which vary from one news organization to the next Read more ...

Essar Steel Algoma and Local 2724 Duke it Out in the Press

Wed, 14 Jul 2010 02:19:49 -0400

Earlier today (Tuesday) Essar Steel Algoma put out a post on the steel mill's blog which clearly identified a standoff in the negotiations with one of their unions: Local 2724. This evening the union struck back with the following press release Read more ...

U.S. Steel Loses Two Blast Furnaces at Gary Works

Tue, 13 Jul 2010 16:32:30 -0400

The U.S. Steel Gary Works had an accident last week which has resulted in the idling of two of the companies four operating furnaces at the facility Read more ...

Essar Steel Algoma Union Negotiations Hitting a Snag?

Mon, 12 Jul 2010 19:11:48 -0400

Essar Steel Algoma posted a detailed analysis of the company's negotiating position with the two unions whose contracts expire at the end of this month. The Canadian steel mill has two unions to deal with - one hourly workers (2251) and one supervisors and line management (2724) Read more ...

Steel Scrap Prices Drop in July will flat rolled steel prices follow?

Sun, 11 Jul 2010 17:09:46 -0400

Compounding steel buyers consternation is yet another drop in scrap prices. This is not unexpected and was anticipated by the scrap dealers. However, as many who attended Steel Success Strategies a couple of weeks ago know, there has been a debate within the scrap community (and those of us who cover scrap prices) as to where prices would ultimately settle and how they will impact flat rolled steel prices Read more ...

Severstal Sparrows Point Blast Furnace Still Running

Wed, 07 Jul 2010 17:47:53 -0400

Market sources have told Steel Market Update that the Severstal Sparrows Point facility has not yet shut down their blast furnace as they have been unable to produce enough slabs to accommodate their Tin Plate customers. Our sources are advising us the blast furnace will be taken down later in the month of July. At this time the projected date is July 25th Read more ...

Congressional Steel Caucus wants to Investigate China Investment in Steel Mill

Sat, 03 Jul 2010 16:54:16 -0400

Politics continues to play with the U.S. domestic steel industry as the Steel Caucus of the U.S. Congress is calling for an investigation of China's Anshan Steel investment with U.S. based Steel Development Company Read more ...

Construction is 1 Reason Why the Steel Business Has Slowed

Fri, 02 Jul 2010 16:14:47 -0400

The Associated General Contractors of America provided an analysis of construction employment data which shows construction unemployment is at 20.1%. Construction is one of the largest markets for flat rolled steel Read more ...

May Raw Steel Production

Thu, 01 Jul 2010 13:51:26 -0400

The American Iron & Steel Institute (AISI) reported final raw steel production and capacity utilization rates for the month of May 2010 Read more ...

John Anton of IHS Global Insight to Speak at Steel Market Update Conference

Wed, 30 Jun 2010 04:06:28 -0400

John Anton, one of the finest forecasters SMU has witnessed in the steel industry has agreed to participate in our first conference on October 19, 2010. SMU last saw Mr. Anton speak to a SBB gathering in March of this year. Those of you who were members at the time may recall it was Mr. Anton who projected steel prices would drop dramatically beginning in May 2010 Read more ...

Severstal NA Revises their Galvanized Coating Extras

Sun, 27 Jun 2010 16:01:56 -0400

Severstal North America (NA) has been the latest mill to adjust (lower) their galvanized coating extras. The extras were “officially” revised on June 23, 2010 and can be found on their website. The new extras posted were for galvanized only. The Galvalume extras continue to be shown at the old numbers Read more ...

Hot Rolled Steel Futures & Hedging Steel Price Risk

Sat, 26 Jun 2010 11:46:20 -0400

The steel market volatility has been growing over the past few years. Understanding steel price risk and how to hedge against steel pricing volatility is a growing concern in the North American steel industry Read more ...

Steel Scrap Prices May be Impacted by Turkish Steel Scrap Purchase

Fri, 25 Jun 2010 17:19:05 -0400

Steel scrap prices on the east coast USA will be impacted by the recent purchase of scrap by the Turkish steel mills. Ultimately, flat rolled steel prices will be impacted as well Read more ...

World Steel Dynamics View of the Flat Rolled Steel Market

Thu, 24 Jun 2010 01:15:39 -0400

Steel Market Update spent the last three days in New York City at the Steel Success Strategies conference. Below is a report we published in our newsletter earlier this week regarding World Steel Dynamics view of the steel world Read more ...

ThyssenKrupp Steel USA to Produce First Hot Rolled Steel In July

Sat, 19 Jun 2010 14:53:09 -0400

Steel Market Update spoke with ThyssenKrupp Steel USA earlier this week regarding when the new U.S. mill would begin rolling their first hot rolled coils Read more ...

SMU Steel Presentation Available Online

Thu, 17 Jun 2010 17:33:15 -0400

We just completed speaking with the Association of Steel Distributors (ASD) at their regional meeting in Chicago. You can now view a copy of our Power Point presentation on our website www.steelmarketupdate.com. Read more ...

Canadian Courts Rule Against U.S. Steel

Mon, 14 Jun 2010 21:10:55 -0400

The federal government has the right to seek penalties against United States Steel Corp., the Federal Court of Canada has ruled Read more ...

Severstal Sparrows Point Steelmaking Operations - a letter of explanation

Fri, 11 Jun 2010 13:36:25 -0400

Severstal NA recently announced they would be idling the "L" blast furnace at their Sparrows Point operation. The plan is to idle the hot end of the mill but the finishing end will continue to produce hot rolled, cold rolled, galvanized, Galvalume and Tin Mill products Read more ...

Iron Ore Negotiations for 3rd Quarter 2010

Thu, 10 Jun 2010 02:28:05 -0400

The Nikkei Business Daily (Japan) has reported BHP Billiton and Rio Tinto have notified Japanese steelmakers of their intention to raise iron ore prices during the July through September quarter (3rd Quarter) approximately 23% Read more ...

June Scrap Prices Stable to Down $30 per long ton

Tue, 08 Jun 2010 01:04:36 -0400

The lack of scrap buying out of Turkey, China and Korea has impacted domestic scrap prices in early May as prices are reported to be stable in the Midwest to down as much as $30 per long ton on the coast according to Steel Market Update scrap sources Read more ...

Severstal Sparrows Point Mill to Idle Steelmaking Facilities

Sat, 05 Jun 2010 16:19:40 -0400

The Severstal NA Sparrows Point mill located outside of Baltimore, Maryland will be idling the steelmaking facilities at the plant (hot end) beginning late this month according to Elizabeth Kovach, spokesperson for Severstal NA in an email to Steel Market Update Read more ...

Scrap Prices for June are down to sideways

Fri, 04 Jun 2010 15:35:24 -0400

Flat rolled steel prices tend to follow scrap prices. Steel Market Update has noted steel prices as moving lower over the past week and now early indications are for scrap prices to move lower to sideways depending on where you are in the U.S. Read more ...

Steel Prices to be impacted by new scrap prices

Thu, 03 Jun 2010 02:18:45 -0400

Steel Market Update is currently conducting our bi-monthly steel market survey so we may better understand both flat rolled steel prices as well as any changes in trends and momentum. One item which will be of importance to hot rolled, cold rolled, galvanized and Galvalume prices this week is scrap prices Read more ...

Essar Steel Algoma in Dispute with Iron Ore Supplier

Tue, 01 Jun 2010 22:24:02 -0400

Essar Steel Algoma (Canada) has notified their iron pellet supplier Cliffs Natural Resources of their intention to take a pricing dispute to arbitration. The steel mill advised Steel Market Update (SMU) this action will allow for Cliffs to continue to send iron ore to Algoma so there is no interruption in their steel making process Read more ...

Japanese Steel Mills Reported to Have Agreed to Further Coking Coal Price Hikes

Tue, 01 Jun 2010 12:35:00 -0400

TOKYO (MarketWatch) -- Some Japanese steel makers have agreed to a further hike in the price of coking coal for the July-September quarter, people familiar with the negotiations said Tuesday, which is likely to increase cost pressures for automakers and other major steel buyers Read more ...

Nucor Lowers Galvanized Coating Extras

Sat, 29 May 2010 03:56:56 -0400

Nucor is the first mill to react to the dropping zinc prices by advising their customers late on Friday of their intention to revise their galvanized coating weight extras. In a letter from the various mill sales and marketing managers the mill told their customers their new coating extras will be in effect on all orders acknowledged to ship the week ending July 10, 2010 Read more ...

Chicago PMI is Good News/Bad News for Steel Business

Fri, 28 May 2010 19:56:40 -0400

Early indications from the Chicago Purchasing Managers Index (PMI) for the steel business are mixed. The PMI continues to be above 50.0 but some of the key data points are moving in the wrong direction Read more ...

Next Move in Steel Prices Should Come Next Week

Thu, 27 May 2010 03:03:29 -0400

So far this week it has been quiet. All is quiet on the steel front as prices have either settled in at their new levels or, in the cases of cold rolled, may have actually tightened up a pinch. The scrap market has been quiet as well as we wait for mill buyers to determine their needs and make their next round of purchases which should happen next week Read more ...

Flat Rolled Steel Imports Decline in April

Wed, 26 May 2010 12:49:15 -0400

Total steel imports (all products) were flat for the month of April 2010 compared to the previous month, according to preliminary Census data released today. Imports totaled 1,880,081 metric tons (2,072,432 short tons) for the month of April compared to the 1,863,740 metric tons (2,054,419 short tons) received during the month of March Read more ...

Steel Mills Asked to Pay 23% More for Iron Ore in 3rd Quarter

Sun, 23 May 2010 16:35:40 -0400

Chinese steel mills have expressed their reluctance to accept iron ore prices of potentially 160 U.S. dollars per ton proposed by Vale and BHP in the third quarter, saying that the price hike will create carnage in the nation's steel industry Read more ...

ArcelorMittal Taking Down 2 Blast Furnaces & Bringing 1 Back Online

Sat, 22 May 2010 14:39:11 -0400

In an effort to “lower costs” an ArcelorMittal spokesperson has advised Steel Market Update of their intention to “take offline” or idle two blast furnaces at their Indiana Harbor facility. At the same time they will bring up a large blast furnace – the “D” furnace at Burns Harbor Read more ...

Severstal NA Sells Remaining Steel Service Centers to Esmark

Thu, 20 May 2010 19:45:38 -0400

Severstal NA has officially announced their intention to sell the balance of the Northern Steel Group assets to Esmark, Inc. Read more ...

SMU Steel Buyers Sentiment Reading at +7.2

Thu, 20 May 2010 18:14:36 -0400

Flat rolled steel buyers and sellers continue to be "slightly optimistic" according to Steel Market Update's most recent Market Survey. SMU's Buyer's Sentiment Index registered a +7.2% and the index has been in "optimistic" territory for approximately six weeks Read more ...

Steel Manufacturing Association Opposes Anshan Investment into U.S. Steel Industry

Wed, 19 May 2010 20:47:03 -0400

Steel Market Update received a copy of the following letter which the Steel Manufacturer's Association (SMA) sent to U.S. Department of Commerce Secretary Locke and the U.S. Trade Ambassador Kirk. The purpose of the letter is to advise the U.S. government that the SMA members are opposed to Anshan Iron & Steel participation in the building of any new steel mills in the United States Read more ...

Severstal NA Completes Sale of Selected Assets of Northern Steel Group

Mon, 17 May 2010 23:10:48 -0400

Severstal NA and Aurora Resurgence, a Los Angeles private equity group, finalized the sale of selected assets of the Northern Steel Group to Aurora. The Northern Steel Group (NSG) is the service center chain which was acquired by Severstal NA when they purchased Wheeling Pittsburgh Steel, Warren Consolidated and Sparrows Point from Esmark Read more ...

U.S. Steel Production Improves with Utilization rate of 74.3%

Mon, 17 May 2010 21:31:17 -0400

Steel production improved this past week according to preliminary raw steel production data released by the American Iron & Steel Institute Read more ...

Anshan Steel (Angang) in JV to Build Rebar Mill in U.S.

Mon, 17 May 2010 13:39:56 -0400

Anshan Steel (also known as Angang) the fourth largest producing mill in China has signed a letter of intent with the Steel Development Company to form a joint venture in the EAF rebar mill under construction in Amory, Mississippi Read more ...

Steel Price Correction Could be Healthy for U.S. Steel Market

Mon, 17 May 2010 05:36:34 -0400

As Steel Market Update has been reporting for some time, steel prices have reached a plateau, and there are even some signs of easing. This is clearly evident in the US, especially on the flat rolled side, but also in many areas overseas, including China Read more ...

Steel Prices Moving Lower - SMU Price Momentum Indicator Pointing "Lower"

Fri, 14 May 2010 03:26:19 -0400

Flat rolled steel prices have begun to move lower over the past couple of weeks. Earlier this week Steel Market Update changed our steel price momentum indicator from "neutral" to "lower" Read more ...

California Steel Rolls Over Steel Prices from June to July

Wed, 12 May 2010 21:04:17 -0400

Steel Market Update has learned from our west coast steel sources that California Steel Industries (CSI) has rolled over (kept prices the same) their flat rolled steel prices from June production into July production Read more ...

Steel Mill Contracts Which are Set to Expire this Year

Wed, 12 May 2010 12:53:14 -0400

There are a number of union contracts with steel mills in North America which are set to expire this year - Severstal NA (Warren, Wheeling, Sparrows Point), AK Steel (Ashland), Essar Steel Algoma and U.S. Steel (Hamilton Works) Read more ...

TMK IPSCO Opens New Steel Pipe Plant in Ohio

Tue, 11 May 2010 18:31:51 -0400

Ohio Governor Ted Strickland today joined TMK IPSCO Koppel Tubular corporate representatives and state and local officials to open the company’s new steel pipe finishing facility in Brookfield in Trumbull County Read more ...

Nucor Announces Flat Rolled Steel Raw Material Surcharge

Sun, 09 May 2010 14:46:17 -0400

On Friday, May 7, 2010 – The Nucor Sheet Metal Group of Nucor Steel informed their flat rolled steel contract customers the mill was lowering the June Raw Material Surcharge (RMS) by $15 per ton Read more ...

Severstal NA Iron Ore Surcharge - The Whole Story

Thu, 06 May 2010 19:47:39 -0400

In an effort to clear up waters which may have become slightly “muddy” over the past couple of days SMU contacted a number of our contacts at Severstal NA to better understand their recent steel pricing change as it relates to their contract customers out of their Sparrows Point facility. Many in the trade press have begun calling the move an iron ore surcharge Read more ...

Steel Market Update Buyers Sentiment at New High

Mon, 03 May 2010 22:00:15 -0400

Buyers and sellers of flat rolled steel products continued to upward march registering a second positive or “optimistic” reading of +8.7 as measured by our SMU Market Survey conducted late last week Read more ...

U.S. and Canadian Flat Rolled Steel Capacity Restarts

Fri, 30 Apr 2010 12:40:00 -0400

Many flat rolled steel users are concerned about over-capacity due to the restarts of various blast furnaces in North America. Steel Market Update put together a listing of the what has come up and is scheduled to come up through early summer 2010 Read more ...

North American Steel Prices in Transition?

Thu, 29 Apr 2010 13:27:33 -0400

Another steel related newsletter suggested it was “normal” for collection of spot steel price increases to lag due to competitive pressures or resistance by end users. While SMU concedes some lag in spot price increases can vary from market to market - from our perspective those interested in flat rolled steel pricing trends have to look a little deeper as we try to evaluate the ability of today’s market to sustain upward price momentum and allow the domestic steel mills to continue to pass through price increases month after month Read more ...

U.S. Steel to Restart Lake Erie Blast Furnace by June

Wed, 28 Apr 2010 19:03:33 -0400

The U.S. Steel Lake Erie Works blast furnace and other steelmaking facilities will be restarting during the 2nd Quarter 2010 according to comments made by the company during their earnings conference call with steel analysts on Tuesday. The Lake Erie plant has the ability to make 2,400,000 short tons of raw steel per year or, about 6,600 tons of melt per day Read more ...

Severstal NA Sells 4 Service Centers to Aurora Resurgence

Tue, 27 Apr 2010 15:43:08 -0400

Severstal NA has entered into an agreement with Aurora Resurgence out of California for 4 of the Northern Steel Group's service center assets Read more ...

Hot Roll, Cold Roll, Galvanized & Galvalume Steel Index

Sat, 24 Apr 2010 12:49:11 -0400

Steel Market Update indexes hot rolled, cold rolled, galvanized and Galvalume steel coils on a weekly basis. Today we want to spend a little time explaining the nuances to steel mill pricing Read more ...

Reliance Steel & Aluminum Passing Through Price Increases

Fri, 23 Apr 2010 15:14:29 -0400

Reliance Steel & Aluminum - one of the largest, if not the largest steel service center group in North America reported their 1st Quarter earnings on Thursday of this week. During their conference call they expressed confidence in their ability to "pass through" all of the price increases announced so far this year Read more ...

Nucor Announces 1Q Earnings Results

Thu, 22 Apr 2010 15:38:10 -0400

CHARLOTTE, N.C., April 22 /PRNewswire-FirstCall/ -- Nucor Corporation (NYSE:NUE) announced today consolidated net earnings of $31.0 million, or $0.10 per diluted share, for the first quarter of 2010. By comparison, Nucor reported a net loss of $189.6 million, or $0.60 per diluted share, in the first quarter of 2009 and earned $58.9 million, or $0.18 per diluted share, in the fourth quarter of 2009.

Nucor's consolidated net sales increased 38% to $3.65 billion compared with $2.65 billion in the first quarter of 2009 due to a 48% increase in total tons shipped to outside customers, partially offset by a 7% decrease in average sales price per ton. Consolidated net sales increased 24% compared with $2.94 billion in the fourth quarter of 2009 due to a 19% increase in total tons shipped to outside customers and a 5% increase in average sales price per ton.

The average scrap and scrap substitute cost per ton used during the first quarter of 2010 was $318, a decrease of 5% compared to $333 in the first quarter of 2009 and an increase of 15% from $276 in the fourth quarter of 2009.

Nucor incurred a charge to value inventories using the last-in, first-out (LIFO) method of accounting of $24.0 million in the first quarter of 2010, compared with a credit of $105.0 million in the first quarter of 2009 and a credit of $116.9 million in the fourth quarter of 2009.

The steel mill utilization rate increased to approximately 73% in the first quarter from 45% in last year's first quarter and 58% in the fourth quarter. As a result of this increased utilization, total energy costs decreased approximately $10 per ton from the first quarter of 2009 to the first quarter of 2010 and decreased approximately $1 per ton from the fourth quarter of 2009.

Pre-operating and start-up costs of new facilities were $50.5 million in the first quarter, primarily related to the SBQ mill in Memphis, Tennessee, and the galvanizing line in Decatur, Alabama. By comparison, pre-operating and start-up costs were $33.2 million in the first quarter of 2009 and $48.1 million in the fourth quarter of 2009. Our liquidity position remains strong with $2.0 billion in cash and cash equivalents and short-term investments and an untapped $1.3 billion revolving credit facility that matures in November 2012.

In February, Nucor's board declared a cash dividend of $0.36 per share payable on May 12, 2010 to stockholders of record on March 31, 2010. This dividend is Nucor's 148th consecutive quarterly cash dividend, a record we expect to continue.

In March, the David J. Joseph Company ("DJJ") acquired the assets and business of Ocala Recycling LLC, which operates four facilities in Florida, including one automobile shredder. Production at the four yards combined totals over 100,000 tons annually. DJJ operates the Ocala Recycling facilities as part of Trademark Metals Recycling LLC. Subsequent to the first quarter, Nucor acquired a 50% interest in NuMit LLC, which will invest in various steel and steel related activities, both in North America and globally. As part of the agreement, Mitsui and Co. (U.S.A.), Inc., a wholly owned subsidiary of Mitsui and Co., Ltd., contributed 100% of Steel Technologies Inc. Steel Technologies operates 23 sheet steel processing facilities throughout the U.S., Canada and Mexico. The transaction is not expected to result in material goodwill.

First quarter results showed significant improvement in the operating rates at our sheet and plate mills, as well as our scrap business. Overall, operating performance improved from the beginning of the quarter to the end of the quarter, and we expect the second quarter to be an improvement over our first quarter results. The most challenging markets for our products continue to be those associated with residential and non-residential construction, which continue to show little, if any, strength. This is particularly true for our downstream businesses. We will provide additional and more quantitative earnings guidance after the midpoint between our quarterly earnings releases. (Source: Nucor)

Steel Market Update will have more information about Nucor earnings and will cover their conference call this afternoon - look for more information in tonight's newsletter.

You can register for a 4-week free trial to our newsletter on our website - www.steelmarketupdate.com

Service Center Steel Shipments Higher in March

Mon, 19 Apr 2010 15:11:52 -0400

The Metal Service Center Institute (MSCI) released their Metals Activity Report on Monday morning. When reviewing the total steel market (all products) shipments improved by 17.2% as U.S. service centers shipped 3,210,400 tons for the month of March. In February service centers in the United States shipped 2,661,000 tons Read more ...

Purchasing Magazine Ceases Operations

Sat, 17 Apr 2010 03:22:20 -0400

Purchasing Magazine and their online presence Purchasing.com ceased operations today (Friday, April 16, 2010) as their parent company - Reed Elsevier - divested themselves of most of their U.S. publications. Over the years we at Steel Market Update have had a great deal of respect for Paul Teague the magazine's editor-and-chief as well as Tom Stundza who followed the steel business for Purchasing Read more ...

California Steel & USS/Posco Steel Price Increase Announcements

Fri, 16 Apr 2010 19:11:21 -0400

We will call it a little friendly competition amongst west coast mills…a couple of months ago California Steel (CSI) announced a relatively minor price increase only to have U.S. Steel/Posco (UPI) roll prices (go to market with no new increases) thus forcing CSI to roll-back their increase. Since then the two mills did go to market in May with a $40 per ton price increase compared to April’s pricing (we are talking about their order book for April and May) Read more ...

USW Ratifies Contract with U.S. Steel

Fri, 16 Apr 2010 03:15:11 -0400

The United Steel Workers Local 8782 reported this evening (Thursday) the results of the union vote to accept or defeat the tentative contract with U.S. Steel at the Lake Erie Works (Canada). The union ratified the contract with 88.5% of those participating casting their votes to ratify the contract Read more ...

USS/Posco (UPI) Announces Flat Rolled Steel Price Increase

Wed, 14 Apr 2010 15:45:15 -0400

Steel Market Update sources on the west coast of the United States have advised us USS/Posco also known as UPI has come out with a $100 per ton price increase on all flat rolled steel products for the month of June production Read more ...

Roll Coater Aquires #18 Coating Line of Material Sciences Corp

Mon, 12 Apr 2010 23:45:54 -0400

Roll Coater and the Material Sciences Corporation (MSC) have announced the acquisition of the assets of the MSC plant #7 by Roll Coater. The equipment included is their #18 coil coating line, a slitter and embosser Read more ...

Severstal NA Announces Flat Rolled Steel Price Increase

Mon, 12 Apr 2010 16:02:59 -0400

Severstal North America (NA) has just informed their North American flat rolled steel non-contract (spot) customers of their intention to increase prices Read more ...

Analysis of AK Steel Price Announcements and Scrap Pricing

Mon, 12 Apr 2010 13:55:10 -0400

A Steel Market Update analysis of the six most recent AK Steel flat rolled steel price announcements and how they relate to scrap price movements. We use the Steel Market Update hot rolled steel index for our comparion Read more ...

AK Steel Announces $40/ton Flat Rolled Price Increase

Thu, 08 Apr 2010 22:03:53 -0400

As way predicted by Steel Market Update over the past couple of weeks - AK Steel announced late today of their intention to raise flat rolled steel prices by $40 per ton affective immediately on any new orders. The $2.00/cwt price increase is on all new hot rolled, cold rolled, galvanized and aluminized orders Read more ...

The Iron Ore Settlements and the Impact on Steel Prices

Wed, 07 Apr 2010 16:12:07 -0400

There is a tremendous amount of interest in the steel community as to how the recent annoucements of quarterly iron ore pricing will impact steel prices here in North America as well as around the world Read more ...

April Scrap Costs Expected to Push Steel Prices Higher

Wed, 31 Mar 2010 15:43:43 -0400

SMU sources are telling us to expect April scrap prices to be higher than March due to continued strong orders out of the domestic steel mills, Turkish mills paying the export price and competing for available scrap and sluggish in-flows of new scrap into the dealer’s yards. Higher scrap costs will mean higher flat rolled steel prices Read more ...

Iron Ore Settlement Means Higher Steel Prices

Wed, 31 Mar 2010 04:31:37 -0400

Media attention around the world is focused on what appears to be the forgone conclusion of the demise of the 40-year old annual benchmark pricing system. Industry sources in Brazil and Australia are leaking information indicating the Japanese steel mills (and Posco in Korea) have agreed to quarterly pricing somewhere around $110-$122 per metric ton for their ore during April, May and June 2010. The previous benchmark pricing was approximately $57 per metric ton so this agreement essentially doubles prices Read more ...

Iron Ore Negotiations - What options do the Chinese Have?

Mon, 29 Mar 2010 01:47:24 -0400

The iron ore benchmarking system has been in place for 40 years and it is believed 2010 will be the year the system will change. The original system called for a single “benchmark” price for all steel mills which buy annual contracts from the big three miners – Vale, Rio Tinto and BHP Billiton Read more ...

Steel Industry News - Severstal NA, The Techs, Duferco Farrell, US Steel...

Fri, 26 Mar 2010 16:22:36 -0400

Here is a quick overview of items deemed important by Steel Market Update as you look at the existing flat rolled steel market in North America Read more ...

U.S. Fourth Biggest Importer of Steel

Mon, 22 Mar 2010 14:05:34 -0400

Last year, according to the World Steel Association, the U.S. ranked fourth in terms of imports (including semi-finished steel bought by the mills). China imported 22.35 million metric tons; South Korea received 20.34 million metric tons, Germany 17.7 million and the U.S. 15.34 million metric tons Read more ...

SMU Steel Buyers Sentiment at -30

Sat, 20 Mar 2010 18:28:26 -0400

When your company is barely making progress – or worse yet falling behind the already scaled down projections – it has to have an affect on those buying and selling steel. Our most recent SMU Buyers Sentiment was measured at -23.0% during this week’s market survey. The latest reading is an improvement of 7.0% points from two weeks ago when Sentiment was measured at -30 and this week reading is the second highest reading we have reported since we began measuring Sentiment in November 2008 Read more ...

MSCI data shows shipments & inventories higher but months on hand stable

Wed, 17 Mar 2010 07:45:38 -0400

The Metal Service Center Institute (MSCI) released their shipments and inventory data for the month of February. Shipments of all steel products in the United States increased from 128,900 tons per day to 133,000 tons per day while inventory levels increased to 6,484,500 tons or 2.4 months supply (unadjusted). Although total tons on the floor increased the months of supply has remained stable due to the shipment increase Read more ...

Nucor pre-announces 1st Quarter 2010 Earnings

Tue, 16 Mar 2010 15:59:16 -0400

Nucor Corporation, a large U.S. based sheet and long products mill, pre-announced 1st Quarter 2010 earnings this morning. The company projected it would fail to meet consensus earnings of $.15 per share. In a note to his clients steel analyst Mark Parr pointed out the mill is forecasting growth in orders, production and shipments of 23%, 26% and 20% respectively compared to 4th Quarter 2009 levels Read more ...

Iron Ore Negotiations Could Push World Steel Prices Higher

Mon, 15 Mar 2010 19:01:21 -0400

The Chinese have thrown their hands up in despair as Baosteel – the lead negotiator for the Chinese steel industry – has been unable to bring the iron ore negotiations to a conclusion. On Saturday ten Chinese steel mills petitioned Premier Wen Jiabao to intervene in the iron ore talks “as a matter of National importance.”

The iron ore mining companies – Rio Tinto, Vale and BHP Billiton – are asking for increases of 80-90 percent above the previously negotiated benchmark which expires on April 1st. Earlier this year steel and mining analysts as well as our market sources in China were projecting iron ore price increases of no more than 45%.

Last year the Chinese were unable to come to a resolution with the mining companies and balked at the deal negotiated by the Japanese mills. As a result many Chinese mills purchased iron ore on the spot market throughout the year. The decision to walk away from the bargaining table last year appears to be haunting the Chinese negotiations this year according to news sources out of China.

The Chinese steel mills feel if the mining companies get the approximately 80-90% increase they are looking for (just below current spot numbers) there will be consequences to the social fabric of China. Prices will have to be raised on automobiles, appliances, construction products and all downstream steel intensive industries.

In Europe they are crying foul just as loud as the Chinese. Eurofer (an industry group composed of ArcelorMittal SA, ThyssenKrupp AG and Corus Group PLC) claim iron ore price increases of 80-90 percent would have a significant impact on steel prices.

In an article published by Forbes the European companies claim higher iron ore costs will force steel prices up and potentially slow down Europe’s economic recovery or even push them back into recession. The mills complain the economy is not as strong as 2006-2008 which was the last time we saw a run up in raw materials. The mills have been unable to pass through all of the scrap and other input costs and higher iron ore costs will force the mills to feel the pain – unlike 2006-2008 when they were able to pass the costs on to their customers.

In an article in MetalMiner.com on Monday they pointed out it is not just the Big-3 Ore companies (Vale, BHP & Rio Tinto) but other mining companies are forcing prices higher. In South Africa ArcelorMittal largest iron ore supplier – Kumba Iron Ore – recently announced they its subsidiary Sishen Iron Ore is suspending shipments to ArcelorMittal South African operations on its long-term cost +3% contract due to a failure by AM to meet its obligations under the South African Mineral and Petroleum Development Resources Act. However, they would be willing to sell at the spot market prices….

North American steel producers are not as exposed (although they are not totally immune either) from the world iron ore spot prices and whatever the new benchmark prices may become. However, the higher iron ore prices on the world market coupled with higher scrap prices in our domestic market are preparing the way for more price increases in North America during 2010. (Source: SMU Asian sources, The Australian, Forbes, agMetalMiner.com)

IHS Global Insight forecast flat rolled steel price decline in 2H 2010

Sat, 13 Mar 2010 22:57:35 -0400

John Anton, Director of Steel Services for IHS Global did not mince words in his opening statement – “I will put a stake in the ground. Prices will come down in the second half of this year for most carbon steel products.” Read more ...

This Weeks Steel Prices and Pricing Momentum

Wed, 10 Mar 2010 15:15:24 -0400

Steel prices in the North American markets continued their move higher this week. Mills took offers for lower priced product off the table at the end of last week according to Steel Market Update sources. Many buyers are “non-believers” and do not think the new prices which are pushing $680-$700 on hot rolled, $800 for cold rolled and a galvanized base price around $800-$820 per ton Read more ...

Steel Prices & Steel Indexes - Making sure they get it right

Tue, 09 Mar 2010 15:04:03 -0400

Steel Market Update reviews steel prices in the North American market on a daily basis. Our indexes cover hot rolled, cold rolled, galvanized and Galvalume pricing in the U.S. and Canada. Since our readers tend to be steel buyers we take the responsibility of being accurate very seriously Read more ...

Steel Market Analysis from September 2009 to Today

Mon, 08 Mar 2010 15:25:22 -0400

Steel Market Update participates in conference calls with steel analysts from time to time in order to provide insights into steel prices, steel inventories and demand as well as the steel market trends we see during our analysis of the steel market Read more ...

Nucor Corporation Raises Steel Prices by $50 per ton

Sat, 06 Mar 2010 03:20:30 -0400

The Nucor Corporation increased prices by a “minimum” of $50 per ton on hot rolled, cold rolled and galvanized steel. The announcement was released to their customers late on Friday afternoon although individual plants had been informing their specific customers of the changes earlier during the week. SMU reported on the Berkeley base price adjustments on our blog on March 3, 2010 and in our newsletter on Thursday March 4th Read more ...

Severstal Hikes Steel Prices by $40 per ton

Thu, 04 Mar 2010 11:16:36 -0400

An internal memo to the Severstal sales force on Wednesday outlined the latest prices for spot flat rolled steel products out of the Severstal mills effective with new orders. Steel prices are up approximately $40 per ton compared to the mills last announcement Read more ...

Nucor Increasing Flat Rolled Pricing

Wed, 03 Mar 2010 16:30:55 -0400

Nucor Berkeley facility is leading the charge and has been telling customers this morning of their intention to collect higher prices on new hot rolled, cold rolled or galvanized steel orders Read more ...

Nucor Announces Joint Venture with Mitsui

Wed, 03 Mar 2010 15:20:49 -0400

Early this morning Nucor announced a joint venture agreement with Mitsui which owns Steel Technologies. This arrangement puts Nucor into the steel processing and service center business and changes the playing field for both Nucor and their customers Read more ...

AK Steel Announces $40/ton Flat Rolled Price Increase

Tue, 02 Mar 2010 23:37:30 -0400

In a move anticipated by Steel Market Update, AK Steel announced this evening an increase of $40 per ton ($2.00/cwt) on all flat rolled sheet products. This increase will affect all new hot rolled, cold rolled and galvanized steel orders Read more ...

Chinese Steel Mills - Iron Ore Benchmark to be 40-45%

Sat, 27 Feb 2010 16:44:30 -0400

Late Friday evening Steel Market Update received a number of messages from our contacts in Asia regarding the Chinese export markets and iron ore pricing. Our sources are telling us the Chinese mills have suddenly suspended providing export offers. Through contacts with a number of the largest steel mills in China the understanding is there will be an announcement some time this week of a settlement to the negotiations regarding the iron ore benchmark pricing Read more ...

California Steel #5 Reheat Furnace to Increase Capacity

Fri, 26 Feb 2010 16:47:46 -0400

Steel Market Update met with executives from California Steel Industries in an effort to improve our understanding of the West Coast flat rolled steel market. This is the first of a number of articles about California Steel Read more ...

Severstal NA Steel Mill Expansion Projects are Moving Forward

Thu, 25 Feb 2010 18:07:31 -0400

Severstal NA has taken their two steel mill expansion projects for Dearborn (MI) and Columbus (MS) off hold. The two projects will increase capacity at Dearborn by approximately 500,000 tons and will essentially double capacity at their Columbus steel mill Read more ...

Steel Mill Pricing - A Customer by Customer Proposition

Thu, 18 Feb 2010 14:32:49 -0400

Steel Market Update takes great effort to insure we have the most accurate data available when it comes to prime mill pricing for hot rolled, cold rolled, galvanized and Galvalume products especially when price adjustments are being made. We understand – and our readers need to understand – the relationship between a mill and a customer is one on one. By this we mean not every customer receives the exact same price from a supplier and prices may vary even within individual mill facilities owned by one company Read more ...

Update on North American Steel Prices

Thu, 18 Feb 2010 01:09:20 -0400

Earlier today Nucor came out with a $40 per ton price increase on hot rolled, cold rolled and galvanized sheet steel. As the day wore on and more information has become available to Steel Market Update our understanding is there is a spread of pricing out of the Nucor mills. By this we mean not all customers and not all mills are receiving the same base prices on each product Read more ...

Nucor Raises Flat Rolled Steel Prices by $40 Per Ton

Wed, 17 Feb 2010 18:07:17 -0400

Nucor announced this morning a $40 per ton ($2.00/cwt) across the board price increase on flat rolled steel products out of all of their flat rolled mills Read more ...

Flat Rolled Steel Inventories at 2.2 Months on Hand

Wed, 17 Feb 2010 17:02:25 -0400

Data just released by the Metal Service Center Institute (MSCI) show flat rolled steel product shipments were at their highest levels since November 2008. The new data show flat rolled shipments of 80,300 tons per day which is a 23.5% improvement over the 61,500 tons shipped per day in December and the best shipment rate since November 2008 when 82,200 tons were being shipped per day Read more ...

AK Steel Raises Flat Rolled Steel Prices

Mon, 15 Feb 2010 21:28:19 -0400

West Chester, OH, February 15, 2010—AK Steel (NYSE: AKS) said today that it will increase spot market base prices by $50 per ton, effective immediately with all new orders for its carbon steel products. AK Steel said that the price increase is in response to increased demand for carbon steel products, as well as the need to recover higher costs. Read more ...

U.S. Steel Restocking Done - for now

Sun, 14 Feb 2010 21:16:42 -0400

We were somewhat surprised with this past week’s Market Survey where we found a reversal of trends we did not expect. One we reported on earlier when our SMU Steel Buyers Sentiment meter reading reversed its improving trend and declined by 7.5 points to -29.1%. Another trend reversal spotted was flat rolled steel inventory rebuilding at both manufacturers and service centers. Read more ...

Nucor Raising Flat Rolled Steel Prices

Wed, 10 Feb 2010 19:08:35 -0400

Nucor Berkeley has begun to advise their customers of a change in flat rolled steel prices effective with any “new orders”. The new base prices are as follows Read more ...

Foreign Steel - When will it flood U.S. Shores?

Wed, 10 Feb 2010 01:39:50 -0400

SMU expects the U.S. will see more international steel coming into the country over the next two to three months as savvy buyers were able to take advantage of niche offers out of China, India, Taiwan, Korea and Russia. Trading companies are telling us the number of inquiries for international steel has grown but most buyers continue to be wary of placing orders at pricing similar to domestic and lead times which extend out to June Read more ...

Steel Market Survey Show Reversal in Steel Restocking Trend

Fri, 05 Feb 2010 15:41:54 -0400

Steel Market Update was surprised earlier this week by a number of trend changes we found in our SMU Market Survey. Steel prices continue to rise - albeit at a much slower rate than a couple of weeks ago. But, our SMU Buyers Sentiment meter reading and the trend to restock inventories appear to have reversed course Read more ...

Steel Pricing "Discounts" vs. "Not Sticking"

Fri, 05 Feb 2010 01:11:02 -0400

Before we present our latest index numbers for this week we want to address the issue of “discounting” vs. “not sticking” when used in relation to mill pricing. To Steel Market Update (SMU), having worked in the steel industry for 3 decades, there is a significant difference between the two terms. Discounting are price adjustments made for various reasons in order to meet or beat your competition Read more ...

SMU Steel Buyers Sentiment Drops to -29.1%

Wed, 03 Feb 2010 04:22:06 -0400

Steel Buyers are feeling the strain caused by lack of demand and price increases which some are finding difficult to pass along to their customers. We have not been dealing with the issue of passing on price increases as a negative factor in any of our surveys for quite some time. Margin constriction appears to be gaining strength and causing the SMU Buyers Sentiment meter to drop from its highest level since we began measuring Sentiment two weeks ago to our latest SMU Buyers Sentiment meter reading which now is -29.1% Read more ...

ISM Report on Business Looks Good for Steel Mills

Mon, 01 Feb 2010 16:53:26 -0400

The Institute for Supply Management (ISM) released their report on the manufacturing sector of the U.S. economy this morning. Overall, manufacturing activity is being reported as having expanded for the sixth consecutive month while the overall economy grew for the ninth consecutive month. This is considered good news for the U.S. flat rolled steel industry and steel prices Read more ...

U.S. Steel Mills Bringing Back Production

Sat, 30 Jan 2010 19:11:09 -0400

U.S. integrated steel mills are reacting to their lead time and production issues by bringing back to life blast furnaces, cold mills and coating lines. Last week ArcelorMittal told the union responsible for Indiana Harbor East Chicago plant (USW 1011) of their intention to bring up the idled IH-4 furnace and #3 melt shop. Over at Severstal the company officially announced the restart of the idled Warren steel mill. Earlier, Severstal announced the re-start of two areas of the idled Wheeling facilities - the cold rolled facility at Yorkville and the galvanizing facility at Martins Ferry. While at U.S. Steel the reline of their largest blast furnace - #14 at Gary Works – will be completed within the next few weeks and will then be brought back online before the end of 1st Quarter Read more ...

Current Steel Market - Notes from Steel Dynanics Inverview

Thu, 28 Jan 2010 15:44:25 -0400

Steel Dynamics (SDI) is seeing improvements in flat rolled steel orders “but it is not yet where we need it to be.” Long products “are a huge problem.” The worst product is wide flanged beams due to the declines in commercial construction markets Read more ...

Steel Executive Brings Home Haitian Children

Wed, 27 Jan 2010 11:41:01 -0400

Jim Bouchard [Esmark] went to Haiti with a plane full of medical supplies and returned Monday with 102 orphans Read more ...

Goldman Sachs "steel prices could be coming down"

Sun, 24 Jan 2010 21:16:26 -0400

On Friday of last week (January 22, 2010) Goldman Sachs put a note out into the financial community regarding their concerns regarding the Chinese economy as the government (Chinese) has “embarked on a tightening process.” In their note the analyst discussed steel mill discounting (in China) and used the following words, “In steel, while not broad-based, we are beginning to see price discounting by some domestic mill, undermining recent price increases and could present a headwind for the stocks.” SMU believes this quote was aimed at the Chinese “domestic” market and not the U.S. Read more ...

Steel Market Update Buyers Sentiment Post New High

Wed, 20 Jan 2010 04:15:00 -0400

SMU Steel Buyers Sentiment improved over the past two weeks and our Meter is now at -21.6% which is 10.6 points better than our reading of two weeks ago and it is the most optimistic level we have seen since we began measuring Sentiment in November 2008. Our SMU Future Sentiment Reading continued its optimistic trend measuring +16.4% although this is 7.9 points lower than our reading calculated two weeks ago.