Final Thoughts
Final Thoughts
Written by John Packard
February 12, 2014
We will hopefully have information and a date for a new workshop we have under development. The new workshop is tentatively being called: Managing Price Risk: Strategies & Execution. The workshop will be for those who already have some knowledge of hot rolled coil (HRC) and busheling (BUS) futures and options trading. Our intention is to provide a workshop for those who want to know more about the various strategies for protecting inventory values, protecting profits or offering long-term firm pricing through the use of futures and options trading. We already have a waiting list so our goal is to have the workshop – which at this time we are forecasting to go over two half days and the first to be held at the CME in Chicago.
We will publish one of our Premium Level newsletter supplements on Friday for our Premium Level members.
The OCTG dumping case decision was postponed today due to the winter weather in Washington, D.C. We should get a decision early next week.
I will be back in the office on Monday after having been stranded in Florida due to the weather in North Georgia (I can tell I am not getting much sympathy for that one). My next trip will be to Austin, Texas for the FMA Tolling Processing conference.
As always your business is truly appreciated by all of us here at Steel Market Update. Thank you for your kind words and recommendations to your suppliers and customers. We continue to grow and your help is always appreciated.
John Packard, Publisher
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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.