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    Analysis

    May 7, 2014

    Final Thoughts

    Written by John Packard

    You can expect to begin to read a lot of articles calling for prices “peaking” or about the subject of where do prices go from here. The expectation is that prices will move lower and everyone will have an opinion or theory as to why this will happen. Others will make the case for sideways or higher prices. Most likely those theories will be based on continued supply-side disruptions as they point to ArcelorMittal taking down their largest blast furnace for two months (June & July) and iron ore supplies taking time to be rebuilt.

    Metals and Mining Analyst Timna Tanners, in a note to her clients, reported scrap prices are “poised to correct” with her contacts reporting May scrap prices down by approximately $15 per gross ton in the Midwest and sideways on other grades. She pointed out her contacts have cold rolled offers out of China delivered to the Midwest at $640 per net ton ($32.00/cwt) for early 4th Quarter. This is compared to the $810 per ton Steel Market Update has as our average for cold rolled this week from the domestic mills. Ms. Tanners conclusion was, “Imminent steel price downswing” would be felt during 2nd Half 2014. Ms. Tanners will be one of our speakers at this year’s Steel Market Update Forecasting & Steel Summit Conference to be held in Atlanta on September 3 & 4th.

    John Packard

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