Final Thoughts
Final Thoughts
Written by John Packard
May 18, 2015
Good evening from Merrillville, Indiana, home of our Steel 101 workshop which started earlier today and continues tomorrow. We toured the NLMK USA Portage, Indiana steel mill this afternoon in absolutely perfect conditions. Its cool here (high 50’s) and cloudy today (we are close to Lake Michigan) after arriving to high 70’s and sunny skies. There is nothing like spring in Northern Indiana (and Chicago land).
We had an “electric” tour of the NLMK this afternoon. Everything was running (which can be a hit-and-miss proposition when visiting steel mills sometimes) and we could see their order book was improving from what it was a month or two earlier this year.
Once again we have a strong group of attendees coming from across the country to participate in our program. We have people from Seattle, Washington; Mobile, Alabama; Cincinnati, Ohio; the Chicago area; Houston and Dallas, Texas; Tulsa, Oklahoma and Dearborn, Michigan and even one from Canada. Manufacturing companies, service centers, fabricators, steel mills (3) and even a hedge fund. We look for diversity in our attendees as it helps when discussing the steel business from different points of view.
We have people who have been involved in the steel industry for many years and I know that one of the attendees has been on the job for a full three weeks…
Our next Steel 101 workshop will be in the Davenport, Iowa on October 6 & 7, 2015 and will include a tour of the EAF producing mill: SSAB. Details and registration will be on our website in the coming days. If you have any questions please give our office a call: 800-432-3475.
Prior to our next Steel 101 my staff and I will have our hands full getting ready for our 5th Steel Summit Conference. We added another exceptional speaker today (announcement to come soon) who will provide us a view of the world from one of the largest trading/commodity companies on the planet earth.
We have introduced a few of our speakers already – Dan DiMicco, Dr. Chris Kuehl, Kevin Dempsey, Dr. Sean McAlinden and we are just beginning to get all you acquainted with the cream of the crop that we have assembled for what promises to be a great two day industry event. Come join us in Atlanta in early September (1st and 2nd) as we dissect current events (strike or no strike?) and forecast what we will be talking about in 2016. Registration is open and early bird discounts are available for the proactive (SMU member discounts are there as well).
Sponsorships and booths are also available for those who want to help us succeed (and help themselves and their brand in the process).
If you have any questions please feel free to contact us in our office: 800-432-3475. We are there to serve.
As always your business is truly appreciated by all of us 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.