Final Thoughts

Final Thoughts

Written by John Packard

I continue to receive positive comments regarding last week’s Steel Summit Conference. What is especially gratifying is the number of speakers who have come back with comments as to how much they enjoyed the conference, the quality of the speakers and the interest of the attendees. Many of our speakers stayed for the entire conference, or at least large portions of the conference, so they too could network with those attending.

I also heard from a number of the attendees who were impressed with what we were doing with our exhibition area. I had at least two companies who asked to be included in next’s year’s conference. The companies that did exhibit were very pleased with the results as it appears that most of the attendees tried to visit each booth during the course of the conference.

There are definitely mixed feelings regarding whether US Steel will lockout the USW later this month or not. The consensus of opinions (and they are just that – opinions) believes ArcelorMittal will not lock the union out. With USS the feelings are mixed with probably half the group thinking they will lockout the union and the other half of the industry believing that there is no way there is a lockout.

What is not in dispute is no one is concerned. The belief is there is plenty of inventory on the service center and manufacturers floors and no one seems to care whether USS goes out or not.

From my past experience, having lived through a couple of strikes, there was quite a bit of consternation and crisis management that went on during the strike period. It will be interesting to see the new breed of purchasing managers dealing with a strike/lockout scenario should one develop. The union is talking tough right now and USS has been very quiet.

Maybe Mittal and USS are waiting to see what happens with the ATI mediation.

I would imagine that USS/Mittal are waiting to see what happens with their largest customers – automotive. They may also be waiting to see what happens to Cliffs Natural Resources as their contract also is due to expire.

No matter what, the next 30 days are going to be critical to the steel industry.

Be advised that SMU is closely watching our Price Momentum Indicator. We are currently at Neutral with a downward bias – especially on hot rolled coil which appears to be the weakest product (due to the weak energy markets). We have left our indicator at Neutral as we wait to see what will happen with labor negotiations at USS/ArcelorMittal as well as the “Big 3” automotive, Cliffs Natural Resources and potentially John Deere. Labor unrest at any of these companies could (will) impact the markets – and they could be in different directions. This is why we have preferred to remain at Neutral. But, I will remind our readers again, at this moment my opinion is there is a downward bias to the market and everyone needs to stay on their toes.

I always welcome your comments. I can be reached at:

As always your business is truly appreciated by all of us here at Steel Market Update.

John Packard, Publisher

Latest in Final Thoughts