Final Thoughts
Final Thoughts
Written by John Packard
November 18, 2015
A note to our Premium level members, we will have another supplemental issue out tomorrow which will contain our Apparent Excess/Deficit forecast for carbon flat rolled service centers in the United States. We also expect to have our Power Point presentation regarding this week’s flat rolled steel analysis (survey) online by early afternoon. We will most likely provide some insights into the Power Point in tomorrow’s supplemental issue.
I am being asked by almost every person I speak with on a daily basis if I believe we are at the bottom. Price wise, with hot rolled being offered to medium and smaller sized buyers at $19.00/cwt ($380 per ton) we are at the levels last seen during the height of the Great Recession. In the last issue of SMU I laid out some of the green shoots. Today I will mention some of my concerns:
– Spot iron ore pricing is dropping in China. Today’s rate was $45.1/dmt for 62% Fe fines. This is down about $10/dmt over the past few weeks. Iron ore is expected to continue to fall and could breach the $40/dmt level due to slowing conditions in China.
– The domestic steel mills lead times and order books are still not quite at the levels they need to be. This may be changing as I mentioned in the last issue of SMU. This is the one item buyers need to watch very carefully.
– Sentiment is down and the market psychology is negative – even though many customers expect 2016 to be a good year (better than 2015).
– Inventories are still too high at the service centers. I will address this issue tomorrow to our Premium customers when I provide how we did with our last forecast and what we expect going forward. We do anticipate inventories dropping and I do have a mild upward trend in our HR pricing forecast going into 2016.
You will notice that we are beginning to role out pieces of our Leadership Summit program. Registration is open for both the conference and the hotel. Both the conference and the hotel are limited so we recommend that you register as soon as possible. We have broken out details regarding the pricing for the conference in the article announcing Diane Thieldfolt pf The Learning Cafe as one of our presenters.
We will have more coming on the Leadership Summit in the coming days. If you have any questions please contact either Ray Culley (Ray.Culley@SteelMarketUpdate.com) or myself: John@SteelMarketUpdate.com (800) 432-3475.
As always your business is truly appreciated by all of us at Steel Market Update.
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!