Final Thoughts

Final Thoughts

Written by John Packard


After three days of non-stop packaging followed by 24 hours of non-stop cleaning we have finally departed our Georgia offices and are in transit (as I write) to our new location in Florida. It is a two day trip so if you call our office you may get a voice mail message – my apologies for that. However, we will monitor the phones and our emails and will respond as soon as humanly possible. We will be in our office in Florida on Monday.

If you need to reach me you can also contact me on my cell phone: 770-596-6268.

I have to apologize as one of our contributing writers failed to deliver the HRC Futures article for this evening’s edition of SMU. Andre is on deck for next week and we will be making changes to compliment Andre’s articles in future issues of our newsletter and on the website. The forward curve data has been updated on the website for both HRC and BUS (scrap).

Due to both my travel schedule and that of Lewis Leibowitz we will be addressing the critical circumstances filing on hot rolled coil as well as updating the due dates for AD/CVD announcements.

This area of our newsletter, my “final thoughts” exists so that I have a forum to give my opinion on topics I deem important at that time. Tonight I want to address those of you who are negotiating 2016 contracts – my opinion is now might be an excellent time to cut your deal… In my mind it seems that the market is waiting for the catalyst that will stop the price slide. If scrap bottoms and begin to move higher as we move into the winter months… If US Steel or ArcelorMittal (or both) decide that they have no option but to lockout the USW in order to achieve the concessions needed… If the trade case rulings end up in favor of the domestic steel mills (and end up being large enough to stem the flow of imported steel)… If AK Steel, US Steel and possibly ArcelorMittal take out the capacity being discussed (publically or privately)… If we have a harsh winter which tends to play havoc with those blast furnaces located in the North (as in all of them since USS Fairfield has shut down its blast furnace)…

There are reasons to not wait too long trying to catch the last drop of price erosion (however, others will still say it is never safe to catch a falling knife…).

Just my opinion – I know that all of our readers have opinions of their own. You are welcome to shoot me an email with your thoughts on the subject: John@SteelMarketUpdate.com

Excuse our shorter than normal newsletter today. Those of you that know me well know I will more than make up for it over the coming days…

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

John Packard, Publisher

Latest in Final Thoughts

Final thoughts

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.

Final thoughts

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?