Final Thoughts
Final Thoughts
Written by John Packard
December 11, 2013
My final thoughts will be brief this evening. I would like to remind both service centers and manufacturing companies if your company has news – expansion plans, new executives, bringing a plant back to North America from overseas, etc. we would like to know. Please send any press releases or correspondence to: info@SteelMarketUpdate.com
My feet are back on solid ground for about the next four weeks as we get through the Holidays. As mentioned previously, I have a speaking engagement in Chicago on January 16th with the AWMI. I also expect to attend the AHR Expo in New York City on the 21st and 22nd of January. At the same time I am working on rescheduling some of the missed meetings due to LaGuardia Airport being closed for fog last week. So, mid to late January looks to be pretty full.
Then in February we move south to Mobile for our next Steel 101 workshop on the 4th and 5th. You can find more details on the workshop on our new website (no log in required).
Our next SMU steel market analysis will be conducted beginning on Monday of next week. A reminder that our new Premium Level members receive a special power point presentation which is housed on the new website. If you are interested in upgrading to Premium or have questions about our new levels of service please feel free to contact me personally: John@SteelMarketUpdate.com.
I want to welcome our newest members and those who have recently registered for a trial of our products. We like to interact with our members so if you have any comments, suggestions or questions do not hesitate to contact me.
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John Packard
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Final Thoughts
Steel equities and steel futures fell hard after news broke earlier this week that the US and Mexico might reach an agreement that would result in the 50% Section 232 tariff coming off Mexican steel. The sharp declines didn’t make much sense, especially if, as some reports indicate, Mexico might agree to a fixed quota. They didn't make sense even if steel flows between the US and Mexico remain unchanged.
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?