Final Thoughts
Final Thoughts
Written by John Packard
July 21, 2014
For those of you who don’t realize it – Steel Market Update is conducting our mid-July market analysis this week. I have added a couple of questions about the sale of the Dearborn and Columbus steel mills. I will send out a reminder email first thing in the morning on Wednesday. If you receive an invitation please take a moment to click on the link and respond to our questionnaire (which is done through SurveyMonkey.com). If you would like someone in your company to take our survey (must be involved in the flat rolled industry in a executive, sales management or purchasing role). The survey will continue through Thursday afternoon.
I want to remind all of our readers that you have full access to all of our website including those areas reserved for Premium Level users. We have opened the website and our Premium Supplemental newsletters to our regular members through the end of July. If you have any questions about how to access our survey results, imports by product, port and country, key market indicators or any other Premium Level product please send us an email and we will walk you through it. Email us at: info@SteelMarketUpdate.com.
Our next Steel 101: Introduction to Steelmaking & Market Fundamentals workshop is open for registration. In fact, it is almost one-third sold out. The workshop will be held in Fort Wayne, Indiana and will include a tour of the Steel Dynamics (SDI) Butler flat rolled mini-mill. We are finding our program is getting more and more popular as companies who have sent people in the past send their newest and brightest employees and executives. The dates on this next Steel 101 workshop are October 7 & 8, 2014. If you have any questions please let me know. If you would like recommendations we can give you a number of people to speak to. I want to thank Steel Dynamics for allowing us to tour their facility as well as their hospitality which is spilling into dinner on the evening of the first day of our workshop.
For that matter I want to thank all of the mills who have been generous with their time and energies and have worked with our Steel 101 team all over the country. We have worked with NLMK USA and toured their Portage, Indiana plant; we have worked with Severstal NA on three occasions – once in Columbus and twice in Dearborn. We know and appreciate the assets just purchased by SDI and AK Steel. We also visited California Steel Industries in Fontana, California where on a September afternoon temperatures reached somewhere around 100 degrees. In Canada we worked with ArcelorMittal Dofasco and their great staff. We also have toured the SSAB mill in Mobile, Alabama and the Nucor Arkansas plant in Hickman, AR.
We would love to work with other mills as we have students lined up from across the country that are thirsting to learn more about the steel industry. If interested please contact me at 800-432-3475 or by email: John@SteelMarketUpdate.com
It’s Tuesday evening and the week is not yet half over. Will this week be one we will be talking about as a game changer for the industry?
As always your business is appreciated by all of us here at Steel Market Update.
John Packard, Publisher
Come join us in Atlanta on September 3 & 4!
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?