I knew the cold rolled trade suits were coming this week. It had been rumored for a couple of months just as the hot rolled trade suits are being discussed for August. It doesn’t make the day of the filing (or night and day if you received one of the USS emails last night) go by any easier. It has been one hectic day.
We have a number of articles in tonight’s newsletter dedicated to the trade suits, an analysis of cold rolled imports from the eight countries hit by the antidumping petition filed by the domestic mills as well as comments from AK Steel which released their earnings this morning.
We have also been working on a number of other articles that I did not want to get lost in tonight’s issue. Some of you may have read the AMM coverage of the CORE (when you see CORE it is about the corrosion resistant trade suit) and the filing of Critical Circumstances against the 5 countries hit by that antidumping and countervailing duty petition. This is a major issue that could have a huge impact on trading companies who traded in goods from China, Taiwan, India, South Korea and Italy.
I traded emails over the day today with attorney Lewis E. Leibowitz (who will be one of our speakers at our 5th Steel Summit Conference) about critical circumstances and some of the unusual timing of this particular filing.
I have a copy of the filing (63 pages long) and I want to review it so we can write a more detailed article on the subject. We will do that for Thursday evening’s newsletter. Those of you buying coated products (specifically galvanized and Galvalume) and having exposure to foreign steel may want to mark your calendars.
The other thing I have been working on is getting a different viewpoint than what the domestic mills have been laying out there. I have comments from both service centers and end users who are not happy about the move against foreign steel because it could potentially create a non-competitive price environment here in the United States and force manufacturing back overseas, just when there was some light shining on the concept of re-shoring manufacturing.
I will be curious to see how Steel Summit keynote speaker, Dan DiMicco tackles the subject of making things in America and being world competitive with our manufactured products. I just gave everyone a couple of great reasons to attend our conference… Registration details are on our website: www.SteelMarketUpdate.com and we have put the companies that are already registered in alphabetical order on the website to make it easier to find your company name (or imagine where it will be once you register)…
One more note: One of our attendees who is coming from Chicago showed us their receipt for airfare to Atlanta which they booked on Southwest Airlines today. The total fare was $88 (roundtrip)…
Hotel rooms are booking up. We have a limited room block that we expect will be depleted within the next week or so. Atlanta Marriott Gateway Hotel and the SMU rate (subject to the room block being available) is $139 per night. The normal rate is $239 per night. Click here for hotel reservations.
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Pubilsher
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Latest in Final Thoughts
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.
What a difference a month makes. There are a few full bulls left in the room, but their numbers are dwindling. We’ll release results of our full steel market survey tomorrow afternoon. I took a sneak peak at the data on Thursday. And more people than I expected think that US hot-rolled (HR) coil prices will be in the $700s per short ton (st) two months from now. Vanishingly few think prices will be above $1,000/st in mid-April.