Final Thoughts
Final Thoughts
Written by John Packard
September 29, 2014
Today is the last day of the month and the last day of the 3rd Quarter 2014. According to one of the attorney’s who spoke at our Steel Summit Conference at the beginning of September today is the day that the domestic mills would want to file a dumping suit so they would not have to include all of the 3rd Quarter data should they wait until 4Q to file. I don’t know how much of an inconvenience or how costly it is to produce the 3rd Quarter data but it would make sense that if the filing is ready and the mills are committed to filing dumping suits that they would be entered today. So, we are watching carefully to see if anything is happening and so far, as of late this afternoon, we are not aware of any suits being filed.
As I spoke with large hot rolled buyers one pointed out that the domestic mills don’t really need to lower prices much lower than were they currently are as the foreign offers have actually gotten more expensive. Hot rolled coil is being offered around $610 per ton Houston. The spread for a large tonnage buyer is no more than $30 to $50 per ton which is not enough to justify waiting for the steel or the possible other risks associated with buying foreign steel.
We heard from one of the service centers in New England that cold rolled and coated offers out of China and India have dried up due to the threat of dumping suits. However, others such as the Brazilians have gotten more competitive and the domestic mills have a $50 to $60 per ton freight disadvantage against material coming out of the ports.
One of our scrap sources told us late today that one of the southern mills made buys at down $10 (primes) and down $15 (shred) per gross ton. The expectation had been for southern scrap prices to trend sideways. We learned there are a large number of maintenance outages which is impacting the number of tons being purchased. All of the domestic mills canceled their open September orders (except SSAB Iowa who canceled truck shipments but allowed rail to continue). The market should shake out by early next week but, as one of our scrap sources stated this evening, “The blood is in the water.”
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John Packard
Read more from John PackardLatest in Final Thoughts
Final Thoughts
A lot of the changes basically entail rolling back what I’ll call, for fun, Section 232 Lite. S232 Lite resulted from watering down what I’ll call OG S232 – the one first imposed in March 2018 - with exemptions and exclusions over the years. Now, OG Section 232, is back with its across-the-board 25% tariffs against everyone.
Final Thoughts
An exciting first look at the results from SMU's first scrap survey.
Final Thoughts
As Wolfe Research’s Timna Tanners put it in her opening talk at Tampa on Monday afternoon, we’re living in a world of “Trumplications” now. That probably means – at least in the short term – higher scrap costs, lower imports from countries hit with or threated tariffs, and higher steel prices. SMU data reflects that. Scrap went up in January. More than 75% of the respondents to our more recent survey expect scrap to go up again February, maybe by a lot. Lead times, meanwhile, have been ticking upward this month. It started with hot-rolled coil and plate earlier this month. Now we’re seeing coated lead times extending too.
Final Thoughts
We joked in our last Final Thoughts that Wiley trade attorney Tim Brightbill – one of the nation’s leading experts on trade law and policy – would probably be revising his presentation on Trump, trade policy, and tariffs for the Tampa Steel Conference. He did. And even after those last-minute revisions, he actually got trumped […]
Final Thoughts
The whole SMU team is packing up our laptops and our SMU polos/cardigans, loading up the PowerPoint slides, and preparing to make the trek down to Florida for the Tampa Steel Conference. There will be plenty to talk about!