Final Thoughts
Final Thoughts
Written by John Packard
April 17, 2015
We will begin our next flat rolled steel market analysis (survey for those of you new to SMU) on Monday morning. Invitations will be sent our by SurveyMonkey.com around 8 AM ET on Monday. If you receive an invitation please click on the link or button contained in the message to access your questionnaire.
Registrations continue for our next Steel 101 workshop which will be held in Merrillville, Indiana just outside of Chicago. The dates for the workshop are May 19 & 20th and the workshop will include a tour of the NLMK USA steel mill located in Portage, Indiana. The NLMK mill is a mini-mill, which means it uses an electric arc furnace (EAF) to reduce scrap to new steel. You can find more information about our program, instructors, costs and how to register in the Events section of our website. If you have any issues or if you have any questions, please do not hesitate to give us a call: 800-432-3475.
In this evening’s issue we have included the most recent currency article which is normally provided to our Premium level members approximately once every three weeks. The value of local currencies against the U.S. dollar is one of the main reasons why commodities (and steel) are having issues. The stronger the dollar the more attractive our market looks to other countries. If you would like to learn more about Premium level membership please contact our office: 800-432-3475 or info@SteelMarketUpdate.com. We will gladly provide a free trial period and we also provide special pricing for existing Executive level members who wish to upgrade their accounts.
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
We just wrapped another Steel 101 Workshop, where you take what you learned in the classroom into the steel mill.
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.