I was advised by the US Department of Commerce that they will announce tomorrow (Wednesday, June 24) whether they will “…initiate AD and CVD investigations of imports of corrosion-resistant steel products from China, India, Italy, Korea and Taiwan.” We will have a fact sheet from them outlining their decision and we will provide it to our readers as soon as we get the decision. I would be shocked if the DOC did not initiate an investigation.
We have an article in tonight’s edition of SMU about cold rolled exports from China being hit by dumping duties out of Mexico. My sources are advising that the cold rolled suit will be filed during the 3rd Quarter 2015 (July has been mentioned on a couple of occasions). I am also being told that hot rolled suits could come at the same time, although those would not be against China as we already have restrictions against imports of HRC from China into the United States.
Cold rolled is a much more difficult product to find injury as it is considered a “transitional” product between hot rolled and coated steels.
Trade attorney, Larry Friedman of Barnes Richardson, told the ASD meeting last week that one of the issues with filing trade cases is you sometimes open Pandora’s Box by allowing non named countries to begin making a market here in the United States. One country on the move is Vietnam. A manufacturing company shared a quote out of Vietnam with me this afternoon for prepainted Galvalume. Is it better to have prepainted Galvalume coming from Taiwan and South Korea or Vietnam?
The Vietnamese mills are also bright enough to inquire with SMU about getting Premium subscriptions to our services…
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John Packard, Publisher
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What are some “Black Swans” to watch out for? With the war in Ukraine entering its third year, your mind might understandably move to conflicts overseas. Here is one closer to home to consider: US trade relations with Mexico taking a turn for the worse. I mention that because the Office of the United States Trade Representative (USTR) dropped a (virtual) bombshell earlier this month.
Domestic prices have been sliding since the beginning of the year, and I don’t see any obvious reasons why the slide might stop this week. But let’s put the timing of a bottom aside for a minute. The question among some of you seems to be whether we’ll see another price spike, or at least a “dead-cat bounce,” before the typical summer doldrums kick in.
I’ve had discussions with some of you lately about where and when sheet prices might bottom. Some of you say that hot-rolled (HR) coil prices won’t fall below $800 per short ton (st). Others tell me that bigger buyers aren’t interested unless they can get something that starts with a six. Obviously a lot depends on whether we're talking 50 tons or 50,000 tons. I've even gotten some guff about how the drop in US prices is happening only because we’re talking about it happening.
We’ve all heard a lot about mill “discipline” following a wave of consolidation over the last few years. That discipline is often evident when prices are rising, less so when they are falling. I remember hearing earlier this year that mills weren’t going to let hot-rolled (HR) coil prices fall below $1,000 per short ton (st). Then not below $900/st. Now, some of you tell me that HR prices in the mid/high-$800s are the “1-800 price” – widely available to regular spot buyers. So what comes next, and will mills “hold the line” in the $800s?
Everyone knows the old saying that “a picture is worth a thousand words.” Just because it’s a cliché doesn’t mean that it’s wrong. A lot of inked has been spilled trying to figure out why prices are falling now. I thought it might be as simple as this: Market dynamics in the fourth quarter (UAW strike, companies buying ahead of an anticipated post-strike price spike, etc.) pulled forward restocking activity that typically happens in the first quarter.