Final Thoughts

Final Thoughts
Written by John Packard
June 1, 2015
As this issue started and I began working on my final thoughts for tonight’s issue, it began with comments from one of our service center friends about the prospect of dumping suits being filed. As the evening progressed I started to receive a number of credible comments from steel mills, service centers and others. The focus then changed to highlight what I was learning and move much of what I was writing from final thoughts into the lead article.
Here is how the original thought began:
A note from one of our readers, “Trade case, odds are 99.9% coated filed tomorrow.” (Tomorrow meaning Wednesday, June 3rd). If this service center (who also was the first person to register to attend this year’s Steel Summit Conference) is correct, kudos. If not, we will have to start some sort of contest to see who can select the date for a trade case. Maybe we should have a second contest to see what countries are filed against by product…
My thanks to those of you who have been sharing what you have been learning regarding trade cases (and other subjects). If anyone out there hears something that you believe to be credible (or raises a question that needs some research) please send it my way. You can reach me almost 24 hours a day at: John@SteelMarketUpdate.com.
It is always good to have fresh eyes looking at your product and services and providing feedback in an effort to help you improve. Here at Steel Market Update we are constantly reviewing and revising our products, whether it be one of our workshops, upgrading our Steel Summit Conference, adding a new conference (Leadership Conference) or looking at our original product: our newsletter. Ray Culley has been reviewing our products and has been making suggestions and we are listening. After all, he was the head of Marketing for Severstal North America prior to his retirement.
We are going to change our newsletter slightly as we move away from producing the interactive graphics in the body of the newsletter. If you read the newsletter in your email inbox instead of going to our website to read it, you know there are huge gaps where the interactive graphics are and this is distracting to many readers.
So, we are going to provide links to the graphics and the newsletter should be easier for many of you to read and enjoy. I do want comments about the change to see if you prefer it the old way or the new way (no gaps).
Hectic day so I am going to sign off here.
As always your business is truly appreciated by all of us at Steel Market Update.
John Packard, Publisher

John Packard
Read more from John PackardLatest in Final Thoughts

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?