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    Analysis

    September 16, 2015

    Final Thoughts

    Written by John Packard

    It appears that very slowly steel buyers are slowly starting to come to a realization that there may be a lockout at US Steel and possibly ArcelorMittal as well. As many of you know, these two mills are not huge players in the spot markets so the immediate impact may be slightly muted should one (or both) of them move to lockout the union in an effort to break the stalemate. Even so, the number of tons being taken out of the market would quickly begin to have an impact on lead times at the other remaining mills. If both mills are involved and the disruption in supply lasts for more than a few weeks (I assume they have built a back-up supply of slabs for their key customers) as the ATI lockout has, well, things could get a bit dicey at that point.

    I certainly am not predicting that there will be a lockout or any disruption in supply. I still look at the ATI situation as what needs to be watched. ATI and the USW are in mediation and maybe they can come to some sort of resolution which can then be emulated by the other mills (or at least break the deadlock). If mediation fails at ATI, then my opinion is that we would have at least one of the mills go out, and if the failure comes a week or two from now and nothing is moving at either AM or USS then they both may go out.

    John Packard

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