Final Thoughts
Final Thoughts
Written by John Packard
November 5, 2014
Nucor followed up their verbal price increase of $20 per ton last week with specific base prices yesterday (Wednesday, November 5, 2014). In a letter from the Nucor Sheet Mill Group, the mill advised their customers that their minimum base price levels on spot flat rolled are now: $33.00/cwt ($660 per ton) and $39.00/cwt ($780 per ton) on both cold rolled and galvanized steels. These base prices are right in line with those announced by ArcelorMittal last week.
We have a jammed packed issue this evening so I am not going to spend a lot of time in my final thoughts. Our survey was completed this afternoon and we will have our Power Point presentation on our website by sometime tomorrow afternoon (Friday). The results are, as always, interesting.
A long time SMU member contacted me today and asked if he could separate from their corporate account and become a Premium member. This individual reports to management across the company and found our imports by product, port and country very telling – especially when it came to new countries entering the U.S. market. The answer is “yes” we will work with all of our existing customers in any way possible. If you would like to inquire about an upgrade, add more people to your account or make other changes we are here to serve you: 800-432-3475 or info@SteelMarketUpdate.com.
I am in the office all day on Friday and I will be traveling on business all week next week.
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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?