Final Thoughts

Final Thoughts
Written by John Packard
April 3, 2015
SurveyMonkey.com handles our flat rolled steel market analysis (surveys) and sends out invitations twice per month. They have made some changes to the way they send out the surveys and the way you access the questionnaire. If you normally get a invitation and have not seen it please check your SPAM folder as it is most likely hidden there. The survey invitations were sent out on Monday at 8 AM ET and then again on Tuesday at 7:30 AM ET. Our next reminder will go out at 8 AM ET on Wednesday morning.
We continue to register more people for our next Steel 101: Introduction to Steel Making & Market Fundamentals workshop which will be conducted in Merriville, Indiana just outside of Chicago on May 19 & 20th. What is nice to see is there are a number of returning companies who continue to send their employees to our workshops. This is a true measure that our workshops are hitting their mark. Come find out for yourself. We still have open spots available. You can find out more about our program, instructors, facilities, costs, etc. on our website. The workshop includes a tour of the NLMK Indiana mini-mill. You are also welcome to contact our office with any questions you might have: 800-432-3475 or info@SteelMarketUpdate.com.
As always your business is truly appreciated by all of us here at Steel Market Update.
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?