Final Thoughts
Final Thoughts
Written by John Packard
November 11, 2015
Even though I personally believe steel prices will probably not go too much lower from here, we still have the SMU Price Momentum Indicator pointing toward lower pricing. We are looking for signs that the slide may be about over but, we continue to see weakness on hot rolled products.
We got a note from a Nucor Berkeley customer today telling us the Nucor galvanized prices quoted this week were actually higher than they were previously. They sent us a lead time table produced by Nucor Berkeley which showed galvanized lead times as being out to the end of January and into February 2016.
We were told that non-corrosion resistant products were being priced competitively with the most recent quote having been lowered.
We are looking for more evidence pointing toward the mills beginning to draw a line in the sand or, beginning to re-evaluate their spot pricing as being too low for market conditions.
Ferrous scrap prices firming in December (they weakened in all markets except the east coast for November) may be another indication that steel prices may be bottoming soon. The expectation is for scrap prices to begin to firm due to weak flows of obsolete grades and tepid demand at the steel mills. Dealers may be willing to sit on scrap in December with the intention of collecting higher prices come January.
We will be carefully watching the MSCI data which will come out next week. Any major reduction in flat rolled inventories would be seen as a positive sign for steel prices (SMU is not, however, expecting a major reduction in inventories during October).
A reminder that our Steel 101: Introduction to Steel Making & Market Fundamentals workshop in Starkville, Mississippi on January 19-20, 2016 is available for registration. You can find details about the program, instructors, hotel and the tour of SDI Columbus which is part of the program on our website. If you have any questions please do not hesitate to contact our office: 800-432-3475 or info@SteelMarketUpdate.com
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John Packard, Publisher
John Packard
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Final thoughts
SMU has heard from some larger buyers who have stepped back into the market to buy at prices that, if not at a bottom, they assess to be close to one. Is it enough to stretch out lead times and send prices upward again? Or do we continue to scrape along the mid-$600s per short ton (st) as we have been doing for most of the last month?
Final thoughts
Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves had some insightful things to say today about the steel market and about a conference we suspect might be Steel Summit.
Final thoughts
They say a picture is worth a thousand words. Well, when you add in some commentary from respected peers in the steel industry to those pictures, that may shoot you up to five thousand words, at least. In that spirit, we’ve added some snapshots from our market survey this week, along with some comments from market participants.
Final thoughts
I thought we’d have more clarity this week on Section 232, Mexico, and a potential carve-out for steel melted and poured in Brazil. As of right now, the only official comment I have is from the Office of the United States Trade Representative (USTR).
Final thoughts
There are just 40 days left until the 2024 SMU Steel Summit gets underway on Aug. 26 at the Georgia International Convention Center (GICC) in Atlanta. And I’m pleased to announce that it's official now: More than 1,000 people have registered to at attend! Another big development: The desktop version of the networking app for the event has officially launched!