Final Thoughts
Final Thoughts
Written by John Packard
December 13, 2013
The marketplace is buzzing as to why the mills east of the Rockies have not yet made a price increase announcement. Someone mentioned to me last week that ArcelorMittal could not push prices higher without attracting attention to themselves due to the announced purchase of ThyssenKrupp Steel USA.
AM does not want to be accused of price fixing. We also heard last week from a number of Nucor customers who felt that Nucor would not be the price leader as they have upset a number of their contract and previous contract customers during the negotiation process. The Nucor customers felt that if the mill made an announcement it would just be rubbing salt in an open wound. U.S. Steel generally does not like to go public with their price announcements. AK Steel and Severstal led last time and still have announcements out there which did not gain traction or support from most of the other mills. SDI never leads with price announcements. This leaves NLMK USA and a couple of conversion and smaller mini-mills.
We would like to hear from our readers – both as to what you think will happen over the next few months as well as what the domestic mills are telling you in their communications with you.
Steel Market Update will conduct our last steel market analysis beginning on Monday of this week. If you would like to be added to our invitee list please send me an email: John@SteelMarketUpdate.com.
I want to take a moment to congratulate Brett Linton who officially graduated from college today. Brett was our first employee hired and he will continue on with Steel Market Update as a full time employee now that his studies have been completed.
As always we want to take a moment to thank you our customers for you business and your recommendations to others to try Steel Market Update. Your business and kind words are truly appreciated.
John Packard, Publisher, Steel Market Update
John Packard
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Final thoughts
Cleveland-Cliffs is seeking $750 per short ton (st) for hot-rolled coil. That’s $20/st above where the steelmaker had been. It’s also $30/st above Nucor, which is at $720/st this week. We've seen prices increase incrementally this week. SMU's HR price, for example, stands at $690/st on average, up $5/st from last week. The questions now are whether a number well above $700/st will stick, whether other mills will follow Cliffs, and whether there is enough demand to support higher prices.
Final thoughts
We got a little flack for adjusting our sheet momentum indicators to neutral last week. To be clear, we didn’t adjust them to lower. Part of the reason we moved them to neutral was because there are some unusual cross-currents in the current market. On the news side, you could make a case that there should nowhere to go but up.
Final thoughts
I think all of us know that sometimes courtships go wrong. A misplaced word or deed and soon things can go sideways, and not in the prices sense. Such could be the case with Japanese steelmaker Nippon Steel’s play for U.S. Steel.
Final thoughts
We’re starting to see some impacts of the big trade case filed last week against imports of coated flat-rolled steel from 10 nations. Namely, we’ve heard that a range of traders have stopped offering material from Vietnam. An alleged dumping margin of nearly 160% will do that. Especially amid chatter of critical circumstances.
Final thoughts
The phrase “political football” has been tossed around a lot lately. (Pun probably intended.) For the humble journalists at SMU who thought the week following Steel Summit would prove a quiet one… the news cycle had other ideas