The headline that you are going to read in not only our newsletter but in other publications as well, will be that the US Department of Commerce found evidence of material injury or potential material injury to the U.S. steel industry and therefore is preliminarily imposing countervailing duties on China, Italy, South Korea and India. Taiwan was found to not be hurting the domestic steel industry and was let off the hook totally.
When looking at the documents closer the amount of the subsidies being imposed were quite low. Here is what one steel mill executive was projecting for subsidies prior to the announcement this afternoon: China 55 percent (actual 26.26 percent except for the named mills that didn’t participate), India 13 percent (JSW 2.85%, Uttam 7.71% all others 5.28%), Korea 1.5 percent (actual 1.37% down to 0.69%). His comment was “anything higher will be gravy…” I assume that anything lower would then be considered a big disappointment.
CVD is only half of the story – the other half is antidumping (AD) which could end up being a bigger victory (or loss) for the domestic steel mills. The date to watch is December 21st (probably announced the following day).
I heard from one of my sources late today that the domestic mills have filed critical circumstances allegations on cold rolled steel. I want to review the legal documents before commenting specifically on this subject. Hopefully, I will be able to do that in time for Thursday evening’s edition of SMU. Since CC was filed on both corrosion-resistant and hot rolled it stands to reason that CR would be hit as well.
Even as we move our offices, work on new conferences and workshops (as well as existing workshops), discuss custom training programs with a number of companies we are also involved in branding (or re-branding) our workshops and conferences. We started the process earlier this year with our new Steel Summit logo and since we have added a new logo for our Leadership Conference and we have developed a new logo for our Steel 101 conference. Let me know if you like the new branding and if you identify with the message(s) we are trying to convey.
I don’t know how many people noticed but, Steel Market Update was used as a source/reason behind the critical circumstances filing. I don’t know if our coverage of hot rolled and cold rolled are also being referenced in the documents submitted to the US Department of Commerce. What all of this tells me is if you are a trading company, foreign mill or buyer of foreign steel it would behoove you to read (become a member) Steel Market Update. Obviously the steel mills and their attorneys do… If you are interested in becoming a subscriber you can do so online or feel free to contact our office: 800-432-3475 (772-245-8630) or by email: info@SteelMarketUpdate.com.
By the way, small business Saturday is November 28th. But we would like to make every day a small business day (which we are). Feel good about doing business with SMU as we are a small American owned business looking to survive among the giants like McGraw-Hill… Tell your friends about us and if they become a member you are eligible for a $100 credit. Contact us for details.
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John PackardRead more from John Packard
Latest in Final Thoughts
A clear consensus has emerged among respondents to SMU’s latest steel market survey that hot-rolled (HR) coil prices will bottom this month or in April. Seventy-five percent of respondents to our latest survey think that prices will find a floor before May as the chart below shows:
I want to give a big shoutout to the good folks at the Fabricators and Manufacturers Association (FMA) for inviting me to their annual conference this week in Clearwater, Fla. I also want to give a special thanks to the FMA for awarding SMU founder John Packard with a lifetime achievement award – on that also gave me a chance to catch up with my old boss in person.
What are some “Black Swans” to watch out for? With the war in Ukraine entering its third year, your mind might understandably move to conflicts overseas. Here is one closer to home to consider: US trade relations with Mexico taking a turn for the worse. I mention that because the Office of the United States Trade Representative (USTR) dropped a (virtual) bombshell earlier this month.
Domestic prices have been sliding since the beginning of the year, and I don’t see any obvious reasons why the slide might stop this week. But let’s put the timing of a bottom aside for a minute. The question among some of you seems to be whether we’ll see another price spike, or at least a “dead-cat bounce,” before the typical summer doldrums kick in.
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.