Final Thoughts
Final Thoughts
Written by John Packard
July 9, 2014
I spoke with the International Trade Administration this afternoon (Thursday) and they advised me that the OCTG Final Commerce ruling announcement will come out between noon and 4 PM ET tomorrow. The deadline date is today, July 10th but the actual announcement is always made on the next business day. We will receive a copy of the ruling when it is released and we will produce an article which will go in our Premium Level supplement issue which is due to go out tomorrow afternoon anyway (and everyone will get it since we are giving our Executive Level members full access to Premium content).
I understand there was a fire at the ArcelorMittal Dofasco blast furnace on Wednesday evening. The fire was related to the failure of a gas valve at the top of the #2 blast furnace. The fire was quickly extinguished and no one was hurt according to media reports.
Besides our Steel Summit Conference our next Steel 101 workshop is seeing an early influx of registrations. The next Steel 101 workshop will be held in Fort Wayne, Indiana and will include a tour of the Steel Dynamics EAF and rolling mill. Details for both our Steel Summit Conference and Steel 101 are on our website.
As always we want to thank you for your business as it is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John Packard
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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.
Final Thoughts
I think there is an obvious case for sheet and plate prices going higher from here. That’s because, on a very basic level, the floor for flat-rolled steel prices, which is typically provided by imports, is now significantly higher than it was a week ago.
Final Thoughts
We're about to hit 50% Section 232 steel tariffs. What could happen?