Our 5th SMU Steel Summit Conference is locked, loaded and ready to go. We move into the sold out Marriott Gateway Hotel early tomorrow (Monday) afternoon where we will begin registration at 4 PM until 6 PM. We anticipate the bar area will be full of steel people on Monday evening so come join us in the lobby. On Tuesday, registration will begin at 7 AM in the lobby of the Georgia International Convention Center which is just a short (covered) walk from the hotel. The pre-Summit presentation will begin at 8 AM followed by the opening of the full conference at 9 AM.
Dress code is business casual – we encourage the wearing of company logo shirts.
Remember to download the App on your smart phone or table before arriving at the convention center.
Our office will be closed on Monday afternoon, Tuesday and Wednesday. We will attempt to check messages but we will be essentially unavailable until later this week.
Tuesday evening’s newsletter will be published but it will be a shorter than normal version. We will catch up in a big way on Thursday before taking a break for Labor Day Weekend (no publication on Sunday).
Tomorrow (Monday) we will begin our early September flat rolled market survey. Please try to complete the questionnaire before leaving for the airport (or on the plane) if you are attending our conference.
Big week with the USW contract expiring at Midnight on September 1st. We expect that USS and ArcelorMittal will continue to work but, we have heard rumors that US Steel may be taking a more aggressive stance. Time will tell and we will be with a whole bunch of steel people should something happen.
Premium members: Key Market Indicators will be published tomorrow in our next Premium level supplemental newsletter.
As always your business it truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
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Latest in Final Thoughts
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.