Economy
The Current Steel Market: Inspired by the Academy Awards
Written by John Packard
March 3, 2014
Steel Market Update received the following steel market analysis from one of our member companies based on the Academy Awards. Sometimes it is better to look at the flat rolled steel market with a sense of humor so here goes:
Current Market Perspective (inspired by the Academy Awards):
The US Steel market continues to be FROZEN, as the weather has created everything from business closures to lost steel production to shipping/transportation issues. No one has been exempt…not even the strong energy markets like Houston or the DALLAS BUYERS CLUB.
Market uncertainty continues to keep purchasing agents on the sideline which means some of the conversion mills and coaters are FACING FEAR that their order books will be weak starting 2nd Quarter. However, their recent pull-back in pricing is driven by slim construction demand and will hardly make the entire steel market test the laws of GRAVITY. Eventually buyers will find the need to come off the sideline. But if this coincides with an increase in overall demand (after the big thaw), and if everyone pulls the AMERICAN HUSTLE at the same time, we just may see order books quickly stimulated and a reversal in mill pricing and therefore market psychology.
The issues at AK Steel Ashland will impact the spot market, evident by recent rumors they are quoting coated spot lead-times out until AUGUST(OSAGE COUNTY – yes, that was a stretch!). ArcelorMittal (Sumitomo/Nippon) closing their deal on ThyssenKrupp will eliminate the lowest priced mill from the market and should equate to further mill discipline. But most importantly, the new era of domestic mill leadership has CEO’s like Mario Longhi, John Ferriola, and Saikat Dey changing the industry (for the better) in effort to prove that their company can become THE WOLF OF WALL STREET while they also try to solidify their legacy as the IRON MAN.
Trust me, John, I am feeling 12 YEARS A SLAVE thus far in 2014. But despite the current market psychology based on slight pull-backs in pricing and soft demand, I still give the 2014 domestic steel market a “THUMBS UP”.
Signed,
DESPICABLE ME
John Packard
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