Final Thoughts

Everybody wants to be the first to announce the new buyer of ThyssenKrupp Steel Americas. Something tells me it will be ThyssenKrupp AG that makes the announcement – and that won’t be done until they have finalized the deal. We can speculate and discuss rumors until we are blue in the face but, until ThyssenKrupp AG says the deal is signed then we should hold back on pushing panic buttons.

The fat lady has been warming up in the wings for the past six months on this one…and no, U.S. Steel did not announce a deal in their conference call this afternoon.

Now to the meat of the breaking news article (discussed in our first article above) released by SBB/Platts earlier today.

I am flabbergasted that a mill executive would forward a memorandum which was under consideration – nothing more than a draft of an idea which evidently was not ready for prime time (their own sales staff and their own customers) but was good enough to go to an industry periodical.

Not just any periodical – but Platts – the organization being considered by a number of mills as an acceptable alternative to CRU when it comes to 2014 contract base pricing and market adjustments.

In my opinion, the purpose behind this “non-memorandum” was a not so subtle effort to influence  negotiations on 2014 contracts and an attempt to create a situation which could possibly influence both spot and contract prices.

I have been sitting here for most of the day thinking what would SMU have done – what would I have done – had the memo been given to me rather than one of my competitors?

Ethics has been a core concern of mine throughout my years in the business. Is it ethical for a mill to float a hypothetical adjustment to their negotiating strategy to the media in order to see if they can move the market in a way which benefits their company?

Wouldn’t the mill have been better served by allowing an interview with the executive who could then present the mill’s views and reasoning in a fair exchange with the media?

For that matter – wouldn’t the mill have been better served to discuss the issue with their sales team and their customers and then watch and wait for the market to play out and have prices settle where business is fair and reasonable for both parties?

I don’t know which mill executive is responsible. The industry is asking was this “non-memo” somehow related to the new management at a couple of mills?  Or, is this the old guard coming up with a new bag of tricks?

I would really like to hear what you think on the subject.  I can be reached at: John@SteelMarketUpdate.com

As always – your opinions and business are both truly appreciated.