Final Thoughts

Final Thoughts

Written by John Packard

I will have a detailed report regarding the HARDI annual conference in Thursday evening’s issue. However, the news is good for those involved in the construction industries with Alan Beaulieu, Chief Economist for HARDI and co-founder of the Institute for Trend Research, proclaiming 2016 will be better than 2015 and 2017 will be even better than 2016.

There are rumors that Nucor will be the first to announce a price increase. This makes sense to me based on a quick analysis I did on mill lead times and found that Nucor mills were the furthest out. Part of the stretch may be due to the holidays and maintenance schedules but mills like Berkeley were reporting galvanized lead times as being as far out as the first week of March. Others, like AK Steel, are reporting lead times as still being in January. So, we have a mixed bag and that may be one of the reasons why the mills are still holding back from making any “official” announcements.

Scrap for December is sideways (worst case) to up as much as $15-$20 per gross ton depending on the region. Scrap dealers are telling us they expect January prices to be higher once again and the early prognostications are $20 to $40 per ton. This may change in the coming weeks but it is a bullish sign for the steel industry and the psychology of the market.

However, we still need lead times to begin to extend and inventories to get to a point where service centers do not need to dump inventory. We will be watching these two keys closely in the coming weeks.

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

John Packard, Publisher

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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.