Final Thoughts
Final Thoughts
Written by John Packard
September 5, 2014
On Tuesday we will do a complete review of the new zinc coating extras. The last report we provided mistakenly identified the Dofasco extras as those of ArcelorMittal USA. There is a difference in their extras due to the value of the Canadian currency against the U.S. dollar. We already have information on our website regarding the changes in extras and we will continue to add information as we now have time to devote to the topic.
We have six to eight places left for our Steel 101: Introduction to Steelmaking & Market Fundamentals workshop which will be conducted in Fort Wayne, Indiana on October 7 & 8, 2014. This workshop will include a tour of the Steel Dynamics Butler, IN, EAF flat rolled mill. You can learn more about the program, our instructors and cost and registration on our website. If you have any questions please do not hesitate to contact our office at 800-432-3475 or info@SteelMarketUpdate.com.
Thank you again to everyone who attended our Steel Summit Conference, to our speakers who did a stellar job and to our sponsors who helped us keep the price at a reasonable level. Next year the conference is scheduled for September 1 & 2 – mark your calendars.
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
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?