Final Thoughts
Final Thoughts
Written by John Packard
November 4, 2015
I had an interesting conversation with a former trading company executive who was reflecting on the number of tons of Chinese galvanized steel that hit the U.S. shores in August, September and October 2015. Depending on when the preliminary determination on countervailing duties is published in the Federal Register, the Chinese mills are subject to critical circumstances which means duties are due on products received into the United States 90 days PRIOR to the publication of the preliminary determination. This is also true of the other countries/mills hit with critical circumstances (such as ILVA out of Italy). Our executive was surprised at the risk being taken on these tons and if a small trader is involved it could put them out of business.
We will have more on this subject in the coming week.
Flat rolled steel prices are now $5 per ton away from the low achieved (albeit very briefly) in May 2009. Our Price Momentum Indicator continues to point toward lower prices as we wait for the catalyst that will push prices higher from here. With scrap dropping again the psychology of the market continues to be “don’t catch a falling knife” and wait for the bounce. It will come and the risk of prices crashing much lower are becoming less and less. The mills will have no choice but to close more capacity (such as USS and Granite City). However, Mario Longhi kept using the words “potential idling” when speaking of Granite City which (to me) means that it is not yet a done deal.
We appreciate your thoughts, suggestions and opinions. You can reach me directly by sending me an email: John@SteelMarketUpdate.com or you can reach me by phone at 800-432-3475 (it is once again going to my office).
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John Packard
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