Final Thoughts

September 30, 2015

I spent part of my day today speaking to buyers who are known to buy foreign steel either due to logistics reasons (too far away from a producing mill) or who prefer to have options for pricing reasons. What I found out is a number of countries involved in the trade suits continue to quote and ship products to the United States.

I found a couple of trading companies who feel comfortable that any duties that might be levied against their mill would be able to be handled internally. One trader who represented a South Korean steel mill on coated products told me that they continue to service their regular customers. They have raised their prices slightly to accommodate any potential duties they may have to pay but, they feel that their mill has not been dumping.

We also learned that a number of the hot rolled producers named in the suits also continue to quote although one buyer told me that he could buy domestic steel at reasonable numbers (around $400). We were told, “International HR is in bad shape. Lead times are short too [just like domestic steel mills]. Thus the aggressive offers.”

This buyer went on to tell us, “Offers under $400 – yes from domestic mills. But not buying because have no need for steel.”

When talking to coated buyers (and traders) we learned that the lowest offers are coming from South America with most pointing their fingers at Brazil. Brazil was one country that was not hit by the CORE (corrosion resistant) trade suits. One buyer told us, “As low as they seem, even their numbers are not a no brainer when we consider how negotiable the domestic mills are currently. Scrap dropping another $40-$50 in October will continue to change the complexion on EAF pricing.” This buyer went on to say, “We aren’t buying much as this dangerous ‘falling knife’ market persists.”

We learned that most, if not everyone, is staying away from China.

We will work more on this subject in the coming days.

I am off to Davenport, Iowa on Monday as we produce of next Steel 101 workshop in cooperation with SSAB. I am looking forward to visiting the SSAB mill as I have not been to their mill in Iowa before.

We will be announcing the location of our next Steel 101 workshop soon. We anticipate we will produce our Steel 101 workshop during January 2016.

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

John Packard, Publisher