It’s been a long day for myself and my SMU team as we host our 5th Steel Summit Conference. The day began early for us with wake up calls around 5 AM after working most of the night on final presentation slides and networking with our attendees at the Marriott hotel where we are staying.
We had a great day with almost all of the 280 attendees managing to find their way to the convention center.This is an increase of 90-100 attendees from our numbers of 2014.
The comments we got throughout the day was we had a great lineup and some very interesting presentations. We will try to share some of the comments made on Thursday once we have a change to look at our notes and digest the volume of information that is being shared with our attendees. We have had a couple of surprises and some really interesting presentations. Our attendees have been challenged by more than one speaker and we look forward to tomorrow (Wednesday) when we anticipate some more fireworks.
As I mentioned on Sunday, we anticipated that this issue would be shorter than normal due to the time that we are spending hosting the Steel Summit Conference. We will more than likely publish a much larger than normal issue on Thursday as this week is a survey week on top of the presentations that we will try to share with you.
As always your business is truly appreciated by all of us here in Atlanta at Steel Summit 2015!
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.