Final Thoughts
Final Thoughts
Written by John Packard
January 24, 2014
The projected forecast for Mobile, Alabama during the first week of February is for temperatures to be in the low to mid 60’s. A far cry from the temperatures which have been well below freezing in the Upper Midwest and at, or below, in the rest of the states north of the Mason-Dixon Line. Steel Market Update still has a few slots open for our next Steel 101 workshop. I thought it interesting of the companies already registered, five of them are sending employees for the second, third or fourth time. Our workshops tend to attract a rather diverse group of companies and this one is no exception. From the director of a internationally known steel-related organization to manufacturing, distribution and suppliers to the steel industry. We have both long and flat product companies attending as we concentrate on understanding the basics of the steel making and rolling process as well as how the materials are sold, used and how commodities, supply and demand and other market fundamentals impact the markets. You can find more on our website or you are welcome to contact our office with any questions you might have. Registration is available online or through our office: 800-432-3475.
Premium level members will get access to the Power Point presentation of last week’s SMU steel market survey as well as a write-up about some of the key areas we found during the survey process. We are also producing our Key Market Indicators for your review this week.
If you are an Executive level member and would like to learn more about becoming a Premium Level member please contact us at: info@SteelMarketUpdate.com or by phone at: 800-432-3475.
If you are currently on a trail of our newsletter – you are receiving the Executive level newsletter. If you would like to learn more about our Premium product you can do so by speaking with one of our representatives: JohnTemples@SteelMarketUpdate.com or Ryan@SteelMarketUpdate.com or through our office: 800-432-3475.
We also have a Monthly level membership which includes our Monthly Newsletter. You can learn more about becoming a Monthly subscriber on our website or by contacting either John or Ryan as noted above.
I will be at the Tampa Port Authority Steel Conference on February 6-7, 2014. Later in February I will be attending the FMA Toll Processing conference in Austin, Texas. The FMA Toll Processing Conference agenda looks quite interesting as there is a large section on Advanced High Strength Steels (AHSS).
Steel Market Update does plan on producing a Steel Forecasting & Steel Summit Conference in September 2014. We will not be working with Metalcon as in past years. We feel this will allow those who were working the Metalcon show an opportunity to attend our conference. We are finalizing details but tentative dates are September 3 & 4, 2014 in Atlanta.
In our Steel Buyers Basics article earlier in this newsletter we mentioned that we are in the process of producing a new workshop: Managing Price Risk 2 – Strategies & Execution. We are aiming at the first week of April in Chicago at the CME Group. Our full program and details will be forthcoming soon.
We have a workshop for everyone. If you would like more details on any of our workshops and/or conferences please check out our website or contact our office: info@SteelMarketUpdate.com.
We also produce custom workshops for companies and organizations. If interested please contact me at 800-432-3475.
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
We just wrapped another Steel 101 Workshop, where you take what you learned in the classroom into the steel mill.
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.