Final Thoughts

September 21, 2015

Demand (or the lack thereof) seems to be the real culprit affecting the steel market and prices at this moment. I spoke with one of the larger service centers this afternoon and asked: would imports be reduced enough to impact U.S. supply and trigger a price spike? I asked what were the chances that the market would turn in 2016 and steel all of a sudden get tight?

The response I got was, “15% chance. Soft demand and over supply domestically – not to mention the international market will keep pressure on the market. Small pockets of volatility can be expected.” They went on to say, “If oil doesn’t come back – what drives demand?”

For those of you who attended our Steel Summit Conference in Atlanta at the beginning of September,Timna Tanners of Bank of America Merrill Lynch Research adjusted her hot rolled coil prognostication for 2016. Her new numbers are: 1Q 2016 HRC = $505 per ton, 2Q 2016 = $510 per ton, 3Q 2016 = $525 per ton and 4Q 2016 = $500 per ton. Average for the year = $510 per ton.

I will keep my comments short tonight.

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

John Packard, Publisher