Final Thoughts
Final Thoughts
Written by John Packard
January 19, 2015
I am in Charleston, South Carolina for our Steel 101 workshop. We have a great group here with representatives from manufacturing, service centers, steel mills and the financial community. The employees at Nucor Berkeley were very receptive to our visit. The mill provided a number of metallurgists so we were able to tour the mill in small groups of 5 people which allowed us the freedom of movement and the ability to get one on one attention with our questions. I want to take a moment to sincerely thank the Nucor team for working with Steel Market Update and our attendees to make this workshop a great success.
For those of you in the north who thought about coming but chose not to for whatever reason… The temperature today was 70 degrees. Our workshop is at the Charleston Harbor Resort & Marina which means we are on the Port of Charleston. I’ve included a photo of the hotel to give you a feel for the ambiance of the place.
Our next Steel 101 workshop will be in Chicago in May.
We are also working on dates for our Sales Training Workshop aiming for June in Chicago.
A question was asked of me by one of our Steel 101 instructors if Steel Market Update would be interested in conducting an inside support staff training program. We have actually done a custom training program for a steel mill on this exact subject. If this is something of interest to you and your company please contact me at: John@SteelMarketUpdate.com.
Its been a long day for all of us here in sunny Charleston and I have to prepare for another training day before heading back to my office.
As always thank you for your business as it is truly appreciated.
John Packard, Publisher
John Packard
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We just wrapped another Steel 101 Workshop, where you take what you learned in the classroom into the steel mill.
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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.
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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.