Final Thoughts

Final Thoughts

Written by John Packard


Here is what I know/understand regarding the situation at US Steel as of early Sunday evening, April 13th. Our sources are advising us USS is moving iron ore from Great Lakes to Gary. We are also following the vessels which are now being reported as in port in Minnesota loading ore. We are aware that there is talk of US Steel considering declaring force majeure on their contracts out of Great Lakes. We do not have any evidence of them doing this although it would make common sense if the mill is not able to have it’s steelmaking back online within a reasonable time frame. I asked US Steel to comment on the status of Gary Works, Great Lakes and the force majeure rumor but they did not respond to my request by the time we published on Sunday evening. We will have further updates on the status of steelmaking at Gary and Great Lakes in Tuesday evening’s edition of SMU.

We anticipate closing registration for our next Steel 101: Introduction to Steelmaking & Market Fundamentals workshop by the end of this week. We have one spot left before we will be considered completely sold out. Those already registered for the workshop represent manufacturing companies, service centers, trading companies, steel mills, toll processors, logistics and the head of an industry organization. This will be a great class and Severstal Dearborn is promising to conduct another wonderful mill experience for our group (a special thank you to Severstal). If you would like to take the last spot you can register online or you are welcome to contact our office at: 800-432-3475.

As with all of our programs there is a benefit to those who are subscribing companies to Steel Market Update. We offer a $100 per person discount for SMU member companies. We also offer discounts for multiple people attending many of our programs.

We anticipate working out final dates with the CME Group in Chicago for our first Managing Price Risk 2: Strategies & Execution workshop. This is a step up from our original Managing Price Risk workshop which was focused on building a base of knowledge about HRC derivatives and the terminology used by HRC brokers. We feel the next logical step is to spend time focusing on specific hedging statagies and then how to execute those strategies in order to obtain a specific result. We will look at inventory management strategies, protection of margin strategies, how to offer long term fixed pricing strategies, etc.

We will then go beyond discussing the strategies and work with our workshop attendees to understand the actual trading process (how to make the initial trade through the conclusion of the specific strategy using futures, options, etc.).

Managing Price Risk 2 will run over two days. We will begin the class at 1 PM on the first day and then at 8 AM on the second day. The program will conclude around 2 PM on the second day. Details, registration and pricing will be available soon (shortly after we arrive at the final date with the CME Group in Chicago where we hope to conduct our first workshop).

We want to welcome our newest members to SMU. Our existing members know that if they have any questions, comments or suggestions that we are all ears here and very willing to speak to or trade emails with our members. You can reach us at: info@SteelMarketUpdate.com or by phone at: 800-432-3475.

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

John Packard, Publisher

Latest in Final Thoughts

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.