Final Thoughts
Final Thoughts
Written by John Packard
October 2, 2013
I made a decision many years ago that when the domestic steel industry (multiple mills) announced price increases that I would automatically move the SMU Price Momentum Indicator to Neutral. Since we are already at Neutral it is important to understand that at this point prices could move up, down or absolutely nowhere from where they are at this moment.
There is a portion of the industry which supports higher prices 100 percent. Another portion who believes – strongly – that market fundamentals will ultimately come home to roost and it is only a matter of time before prices tank.
The next few weeks will be interesting.
Our next Steel 101: Steelmaking & Market Fundamentals workshop will be in Mobile, Alabama on February 4th and 5th, 2014. Part of the workshop will be a tour of the SSAB plate and hot rolled mini-mill (EAF) in Axis, Alabama. We are working on finalizing details regarding hotel and other logistics as well as tweaking our program. We anticipate being able to take registrations within the next week or two. If you have any questions please contact us at: info@SteelMarketUpdate.com or by phone at 800-432-3475.
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard
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Final Thoughts
Even before the news about Mexico, I didn’t want to overstate the magnitude of the change in momentum. As far as we could tell, there hadn’t been a frenzy of new ordering following President Trump’s announcement of 50% Section 232 tariffs. But higher tariffs had unquestionably raised prices for imports, which typically provide the floor for domestic pricing. We’d heard, for example, that prices below $800 per short ton for hot-rolled (HR) coil were gone from the domestic market – even for larger buyers.
Final Thoughts
I want to draw your attention to SMU’s monthly scrap market survey. It’s a premium feature that complements our long-running steel market survey. We’ve been running our scrap survey since late January. And over just that short time, it’s become a valuable way not only for us to assess where scrap prices might go but also to quantify some of the “fuzzy” indicators - like sentiment and flows - that help to put the price in context.
Final Thoughts
I think there is an obvious case for sheet and plate prices going higher from here. That’s because, on a very basic level, the floor for flat-rolled steel prices, which is typically provided by imports, is now significantly higher than it was a week ago.
Final Thoughts
We're about to hit 50% Section 232 steel tariffs. What could happen?
Final Thoughts
With higher tariff rates on steel and aluminum set to go into effect on Wednesday, June 4, a new round of chaos across the supply chain is likely in store. Expect a significant impact on manufacturers and metal fabricators. But even before the latest round of Trump-tariff whiplash on Friday evening, there was a lot of interesting data coming out of SMU's steel-market survey.