Final Thoughts
Final Thoughts
Written by John Packard
October 8, 2014
I noticed that one of our Steel Summit speakers, Timna Tanners of Bank of America Merrill Lynch Research, has been named to the All-America Research Team as the Number 1 Metals & Mining Analyst by Institutional Investor. This is the second number one ranking for Tanners in as many years. Timna is a fan of SMU and referenced some of our research and opinions in her notes to her clients.
I want to welcome all of the new free trials who have registered over the past week or so. We seem to have had a swarm of registrations recently. Please take some time to review our website, look at our archives, resource materials and Premium level content (such as our survey results, imports by port, etc.). If you have questions do not hesitate to contact us: Info@SteelMarketUpdate.com. More than likely you will get a return answer from me.
I received a number of notes from metals & mining analysts disagreeing with my “opinion” that we won’t see dumping suits filed on light flat rolled over the near term. One analyst pointed out that the mills have worked on past filings for years before actually submitting the suit. My horizon does not look that far out. I was also asked if there was ever a time when dumping suits were threatened but not filed. Since I happen to have been with three highly experienced steel people over the past few days as we conducted our Steel 101 workshop, I asked them that question. They recalled threats being made in the 1980’s that were not followed through on. If anyone out there has information about past threats that did not become actual suits – please let me know. Send your comments or to relate your stories send them to: John@SteelMarketUpdate.com
The currency issue is a big deal for the steel industry and one that steel buyers need to be aware. We do a monthly analysis of the steel producing / exporting countries currency values against the U.S. dollar on a monthly basis for our Premium level (and free trial) members. I believe the last one was published within the past week or so. If you are not a Premium member you may want to keep an eye on the Wall Street Journal on the subject.
I just realized that I will be in Las Vegas for the Association of Steel Distributors Fall Meeting which will be held over Halloween… Anyone have any good ideas for a costume for yours truly?
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard
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Final Thoughts
Getting back to the price increases I mentioned at the top of this article, to what extent are they aimed at raising prices and to what extent are they aimed at stopping the bleeding that was happening in the second half of May, before President Trump announced the 50% tariff?
Final Thoughts
We just wrapped another Steel 101 Workshop, where you take what you learned in the classroom into the steel mill.
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.