Final Thoughts

Final Thoughts

Written by John Packard

Hello from Orlando where the weather is sunny with temperatures in the low 80’s… Come to think of it I believe today is the first day of spring – and it couldn’t have come at a better time. One of the complaints being picked up in this week’s steel survey has been the impact the nasty weather has had on business during the months of January and February. However, many believe there is pent up demand in the wings and business will improve.

I spoke with the top executive of a medium size service center who told me their customers were placing order like crazy. His company is being led to believe that there is much more business coming in the 2nd and early 3rd Quarter than there has been over the first three months of 2014.

With the exception of AK Steel, who this evening came out with an increase on hot rolled but nothing on cold rolled or coated (where they have nothing to sell into the spot market anyway), just about all of the domestic mills that make pubic or semi-public announcements have followed the ArcelorMittal lead and have come out with price increases. The numbers are all either exactly the same or very similar with hot rolled base prices being referenced at $660 per ton ($33.00/cwt) and cold rolled and coated steels being referenced at $790 base ($39.50/cwt) plus applicable extras. As mentioned at the beginning of this paragraph, AK Steel has not yet made a move even though they have literally no spot tonnage to sell.

On Sunday I will have an article about the potential “unintended consequences” related to this attempt to push prices at this time.

I am in Orlando to participate in the Association of Steel Distributors annual conference. This afternoon I was speaking with James Barnett of Grand Steel Products about one of their employees who had attended our Steel 101 workshop almost two years ago on his very first day on the job. Mr. Barnett told me the employee is doing very well and is an asset to their company.

The next two day workshop will be conducted in Dearborn, Michigan at The Henry Hotel and will include a tour of the fully integrated Severstal Dearborn steel mill. There is no finer way of learning about the steel making process than to interact with John Eckstein and Peter Wright (both metallurgists) as well as Steve Painter prior to going on an exceptional mill tour. We have toured the Severstal Dearborn facility before and they do an excellent job of reinforcing what our workshop attendees learn in the morning. You can get more information about our Steel 101: Introduction to Steelmaking and Market Fundamentals workshop on our website or feel free to contact our offices at: or by phone: 800-432-3475.

As always your business is truly appreciated by all of us here at Steel Market Update.

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Final thoughts

Last week was a newsy one for the US sheet market. Nucor’s announcement that it would publish a weekly HR spot price was the talk of the town – whether that was in chatter among colleagues, at the Boy Scouts of America Metals Industry dinner, or in SMU’s latest market survey. Some think that it could Nucor's spot HR price could bring stability to notoriously volatile US sheet prices, according to SMU's latest steel market survey. Others think it’s too early to gauge its impact. And still others said they were leery of any attempt by producers to control prices.