Final Thoughts
Final Thoughts
Written by John Packard
April 18, 2014
Happy Easter to everyone! Normally Steel Market Update would not publish on Easter Sunday due to it being a holiday in the United States. However, we have so much information to share with our readers I decided not to let it wait and to publish.
If domestic flat rolled steel prices continue to rise there will be a growing swell of steel buyers heading to foreign shores to acquire their products. We shared the data we collected during the survey process with our Premium members last Friday regarding how the percentages of those considering buying steel have grown in recent weeks. We also shared data regarding the spread between world import export pricing and our domestic average – and we have to remember that our SMU Price Momentum Indicator continues to point toward higher domestic pricing which, if accurate, will increase the spread between foreign and domestic. We will have more on this subject in upcoming issues of Steel Market Update.
By the way, if you would like to learn more about the various options we have for membership: Premium, Executive and Monthly – you can find information on our website under both the Newsletters and Subscription tabs. You can also find information about corporate (multi-person) subscriptions in our website or, you are welcome to contact our office at: 800-432-3475 or: info@SteelMarketUpdate.com.
If you are already an Executive member and would like to trial a Premium Level membership please contact John Temples at: JohnTemples@SteelMarketUpdate.com or contact our main office: 800-432-3475.
We anticipate one or more Premium supplement newsletters in the coming week.
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
Getting back to the price increases I mentioned at the top of this article, to what extent are they aimed at raising prices and to what extent are they aimed at stopping the bleeding that was happening in the second half of May, before President Trump announced the 50% tariff?
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.