Final Thoughts
Final Thoughts
Written by John Packard
June 4, 2014
I was asked a number of times today – in a couple of different ways – why Steel Market Update has not adjusted our Price Momentum Indicator from Neutral where it has been for about one month to Lower. The reality is we have been watching spot flat rolled pricing quite closely to see at what point would we start to see a wholesale movement toward lower prices.
There are some unusual circumstances with the current market in that you have two mills: US Steel and ArcelorMittal who have lost, or continue to lose, significant amounts of raw steel production due to both planned and unplanned outages. We also had the ice situation on Lake Superior and around Saute Ste Marie that has impacted iron ore shipments and we are hearing that Essar Steel Algoma is only now offering some spot tonnage into the U.S. for August delivery.
On the flip side AK Steel has caught up with their order book and evidently has a large amount of slab in inventory. We are hearing that NLMK USA may also have some extra slab in stock.
As one former trading company executive put it to us earlier today, “Everyone should be enjoying this pricing environment and taking advantage of the orders they can get at today’s price levels.”
Watch our website and blog as we are evaluating what we are going to do with our Price Momentum Indicator and could make a change at any moment.
The talk is hot and heavy that there will be new dumping suits filed, perhaps as early as right after the oil country tubular good (OCTG) trade cases are resolved in July. The expectation is there will be suits filed on cold rolled and coated.
We are preparing for this to be an important topic of conversation at our September 3 & 4 SMU Steel Summit Conference in Atlanta. We spoke with one attorney today who has tentatively committed to speak at our conference on the topic and we are working on a counter party to his position. We hope everyone is planning on attending what we believe will be one of the strongest conference programs available anywhere.
Be aware that we are building the Steel Summit web pages on our website so you might see some oddities (like under our schedule tab) as we build out each section. Even so, our registration page is working and you are welcome to register for the conference.
We are also getting close to selling out our Managing Price Risk II: Strategies and Execution workshop in Chicago on June 24 & 25, 2014. I was speaking with the president of a service center who had attended our Managing Price Risk I workshop in New York City a couple of years ago. Since then he has not made a trade due to not being sure what he should be doing and hearing the horror stories from others who made ill-advised trades and were burned in the process.
The key is to understand what you are trying to accomplish and then executing the proper strategy. That is what our Managing Price Risk II workshop is about.
I hope to see you in New York City in the middle of this month, Chicago the following week and then Atlanta on September 3 & 4.
As always your business is truly appreciated by all of us at Steel Market Update.
John Packard, Publisher
John Packard
Read more from John PackardLatest in Final Thoughts
Final Thoughts
Will a US-UK meeting next week prove a harbinger of tariff deals to come, or will it be just another case of having the rug pulled from under us?
Final Thoughts
When will we see prime scrap become scarce as the worldwide transition to EAF melting increases, especially for HRC production? It's a question I've been asked a lot.
Final Thoughts: The hidden cost of analysis paralysis in the age of uncertainty
With US economic indicators all over the map, it’s no wonder the steel market has experienced a whole lot of analysis paralysis this year.
Final Thoughts
A recurring theme in conversations with some of you and in the comments submitted in our surveys is concerns about demand and uncertainty around tariffs. Where does SMU’s latest opinion polling on President Trump’s tariffs stand? Let’s take a look at the numbers.
Final Thoughts
I’ve been getting some calls lately from some of you who want to kick around ideas on where prices might bottom and when.