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    Analysis

    February 18, 2015

    Final Thoughts

    Written by John Packard

    I was relieved to see the Sentiment 3MMA trend break after dropping for almost five straight months (since mid-September). I am not quite yet ready to say we have vanquished any growing pessimism within the flat rolled steel industry. But, breaking the streak was the first step.

    I have a number of concerns. The continuation of huge amounts of foreign steel imports is a worry. It just means it will be that much longer before inventories are stabilized at the service centers. I spoke with the owner of a mid-sized service center this morning and he told me he was concerned about the amount of inventory he was holding for some of his contract customers. He is not worried as the inventory is all committed but, when prices drop as fast as they have, you have got to start to wonder if some of your tons are being supplanted by spot tons out of a mill or another service center. If that is not what is happening, then the higher inventories are due to changing demand at that particular customer. That may actually be an even larger concern to this service center.

    John Packard

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    SMU scrap market survey results now available

    SMU’s November ferrous scrap market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the Pricing and Analysis tab and look under the “survey results” section for Ferrous Scrap Survey results. Past scrap survey results are also available under that selection. If you need help accessing the survey results or if your company would like to have your voice heard in our future surveys, contact smu@crugroup.com.

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    Market chatter: Supply, not price, dominates steel buyers’ concerns

    On Monday and Tuesday of this week, SMU polled steel buyers on an array of topics, ranging from market prices, demand, and inventories to tariffs, imports, and evolving market events. We are sharing a selection of the comments we received below, in each buyer’s own words. Before diving in, we reviewed all the responses collected and compiled these key takeaways: Respondents overwhelmingly anticipate further increases. Buyers cite limited supply, mill delays, low inventories, and steady-to-strong demand. Most say demand is generally stable to improving, with some purchasing driven by fears of higher prices or unavailable material rather than stronger underlying consumption. Most respondents report faster inventory turnover, while shortages are constraining sales and, in some cases, prompting customer allocations. Buyers increasingly see imports as a way to secure scarce material, though domestic-origin requirements, delivery timing, and pricing risks remain obstacles.