Final Thoughts
Final Thoughts
Written by John Packard
May 13, 2015
Short comments this evening as I am attending the Metals Industry Dinner (Boy Scout Dinner) in Chicago. The sentiment within the room was mostly optimistic, although there were a number of conversations about April not being a great month or not meeting expectations. This would help explain some of the weakness seen in the MSCI data which was reported earlier today.
There were a number of conversations about the upcoming negotiations between the USW and ArcelorMittal and US Steel. The thoughts were that AM would once again take a strict tone in negotiations.
The other issue being discussed was what were the chances for dumping suits to be filed. The opinions were running high that dumping suits would be filed soon – but, no one knows when “soon” will come. As Andre Marshall stated in his futures article this evening there has been a lot of “blah, blah, blah…” when it comes to the conversation about dumping suits. This conversation is well over a year old with no suits having been filed to date.
Congratulations to Lori Hahn of Steel Dynamics for receiving the Good Scout Award this evening for her work on the Boy Scout Dinner and raising money for scouting.
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
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.