SMU Data and Models
USW, US Steel & ArcelorMittal Negotiations Are You Preparing?
Written by John Packard
June 18, 2015
Steel Market Update reported in the Tuesday issue of our newsletter that negotiations have started between the USW (United Steelworkers Union) and ArcelorMittal.
The issue was raised at the Bank of America Merrill Lynch dinner where SMU publisher, John Packard, spoke last night. We have been anticipating that the posturing by the union and AM, as well as US Steel, will be one of the main topics of the summer. This is indeed the case.
We asked our survey respondents, “Do you plan on building inventory (or adjust sources of supply) in light of the USW negotiations with USS and ArcelorMittal (contract expires on September 1, 2015)?”
Thirty-one percent (31%) of our respondents reported that they would be building inventory and/or adjusting sources of supply in order to protect their businesses. This leaves a full 71 percent who are comfortable with their current situation and supply sources.
This was another question where the respondents chose to leave comments regarding the question or their response:
“We are considering a slight building of inventory. But we are closely watching the UAW/Automaker negotiations as this has an impact on price/availability as well.” Manufacturing company
“Inventory build yes source adjustment no.” Service center
“We will build inventory for our OEM customer base.” Service center
“We are looking at alternative sources for the items purchased from USS and AM. “ Service center
“There will be some areas I’m sure where we build a small bank but based on the strength of our relationship with Arcelor, we will work together so our customers are protected.” Service center
“Not expecting a strike. Lots of posturing but too much red ink at Steelmakers my bigger concern is the UAW.” Service center
John Packard
Read more from John PackardLatest in SMU Data and Models
August service center shipments and inventories report
US service centers flat-rolled steel supply in August declined month-over-month (m/m) and year-over-year (y/y), according to SMU data.
Apparent steel supply remains elevated in July
Apparent supply totaled 8.88 million short tons (st) in July, down 38,000 st from June and 6% higher than the same month last year
HRC vs. prime scrap spread narrows slightly
The price spread between prime scrap and hot-rolled coil (HRC) narrowed by a hair this month, according to SMU’s most recent pricing data.
SMU Scrap Survey: Current Sentiment rises as Future Sentiment falls
SMU’s current Scrap sentiment index increased this month while future sentiment declined, according to our latest ferrous scrap survey data.
SMU scrap market survey results now available
SMU’s September ferrous scrap market survey results are now available on our website to all premium members.