Final Thoughts
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Final Thoughts
Written by John Packard
January 6, 2016
I was speaking with a large service center which buys mostly hot rolled this afternoon. We were discussing what each of our opinions were regarding the direction of pricing and how 1st quarter will ultimately come out. In the process this executive (who buy the way will be attending our Leadership Summit Conference) told us there business, although not setting any records was a bit better than expected in December. We heard from a second service center executive who told me earlier this week that their company had a surge of orders/shipments during the last two weeks of December which resulted in their month being up by something like 20 percent. This was totally unexpected.
So, my opinion is that I am optimistic about the industry and I was very pleased to see the 3 month moving average (3MMA) break the downward cycle and move higher for the first time in many months (see Sentiment article).
It is also nice to see a graphic visual of both lead times and negotiations which are suggesting the worst is behind us.
The next data set that I am waiting for is the MSCI inventories and our analysis of the “Apparent Excess/Deficit” in flat rolled inventories at the service centers. We are forecasting a drop in inventories although we think it will still be March before they will be at levels where buyers “have to” buy.
Of course, everyone has to remember where lead times are. The first service center executive mentioned above told me today that they were seeing spot HRC lead times out into March at some of the northern mills. I was also told that AM mentioned the word “prioritizing” when discussing orders and when they would be produced. We were told USS has already moved the Granite City orders to another facility.
The face of the market is changing which leads me to be optimistic.
I would like to hear from your company. How are you finding the market and what is the tone and direction of the discussions you are having with both your mill and service center suppliers? You can communicate with me directly at: John@SteelMarketUpdate.com
As always your business is truly appreciated by all of us here at Steel Market Update. Come join us in Palm Beach Gardens, Florida for our Leadership Summit Conference!
John Packard, Publisher
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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?
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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.
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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.
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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).
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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!