Final Thoughts

Final Thoughts
Written by John Packard
January 16, 2015
While speaking with a couple of the secondary flat rolled steel distributors this past week, we got into a discussion about the advanced high strength steels (AHSS) and what impact they were having on the secondary market. A number of service centers pointed out that the product was fine for flat parts or those with a 90 degree bend. The product has been going into some construction products such as wall ties and edging. The issue is not the original form or bend put into the steel it is the secondary process such as knockouts finds the material too hard to work.
A secondary service center in the South told us regarding high strength steels, “New HSS products constitute an ever-increasing share of secondary steel and they are problematic because their physical characteristics make them unsuitable for many of the typical non-prime applications. These products are in some ways reverse engineering the supply chain for secondary users. It represents an opportunity for customers who can use these extremely hard steels, but a dilemma for those who cannot as the available pool of commercial grade steel diminishes. When the market tightens at some point in the future, those who have not adapted their processes to accept these new grades may well find themselves with limited sourcing and premium pricing for what limited amounts of material they are able to obtain. This trend to HSS does not appear limited to automotive, but is occurring in other segments as well.”
Something for both the supply chain and end manufacturing companies to think about. There is both a challenge to the existing supply and an opportunity for those companies who find alternative end uses for these new steels.
I will be traveling to Charleston, SC tomorrow and will be at our Steel 101 workshop on Tuesday and Wednesday. I expect to return to the office on Thursday.
We will have an excellent article on the energy market in Tuesday evening’s newsletter. I expect the article may come as a surprise to many of our readers.
We will conduct our next flat rolled steel market survey beginning on Monday morning. Look for your invite around 8 AM ET. If you are not receiving an invite to participate in our survey please shoot us an email at info@SteelMarketUpdate.com with your name, company name, position and email address. All responses are kept confidential.
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 Tanner 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!