Final Thoughts

Final Thoughts

Written by John Packard


Happy Academy Award (Oscar) Night…

We will begin our early March flat rolled steel market trend analysis on Monday morning. If you receive an invitation to participate please take a few moments to click on the button contained in the message which will take you to our questionnaire. If you would like to participate in our questionnaire and are not yet on the invite list please send me an email: John@SteelMarketUpdate.com.

We heard from one of our scrap sources that there is a shortage of scrap in the Chicago and Detroit markets – especially obsolete grades. Negotiations will begin this week on for March scrap pricing. Last week many dealers were expecting a sideways market.

I was looking at the Nucor Berkeley lead time sheet late last week. Cold rolled lead times were out to late May/early June and galvanized was on an “inquire” only basis.

Plate lead times are much different than cold rolled and coated products. We learned over the weekend that Nucor and SSAB plate lead times were 2-3 weeks max while ArcelorMittal was out 6 weeks. Plate prices are negotiable for offers of 500 tons or greater.

I will take a deeper look at lead times, changes in production/capacity, etc. this week. If you have information about specific mills production capabilities, what maintenance is scheduled and where lead times are for individual plants please shoot me an email at: John@SteelMarketUpdate.com.

Do I think it is shocking that steel prices haven’t move much in the past few weeks? You have to remember that I started in the business when a $10 per ton move over a few months was considered a big move… The second question is can the spread between hot rolled and coated products (in excess of the traditional $100-$120 per ton) continue, I think as long as the demand for hot rolled continues to be challenged and other products are doing well then the spread can continue. I go back to a comment made to me by a mill executive who pointed out to me that the spread at $100-$120 has been too low when considering the actual costs to produce the upstream products.

Will the economy weaken as the year progresses? There is some talk in the financial press of a “recession” that is being caused by the actions of the Federal Reserve… I am going to answer the question with a video link from HARDI to comments being made by Dr. Alan Beaulieu of the Institute for Trends Research (ITR). Dr. Beaulieu is one of our Keynote Speakers at this year’s Steel Summit Conference. The second is to say stay tuned as another one of our Keynote Speakers is Chris Oakley, Vice President and Regional Executive for the Federal Reserve Bank of Atlanta…

We will have more about demand and what we are learning from our latest survey later this week – stay tuned.

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

John Packard, Publisher

Latest in Final Thoughts

Final thoughts

What's the tea in the steel industry this week? Here's the latest SMU gossip column! Just kidding... kind of. Yes, some of the comments we receive in our weekly flat-rolled market steel buyers' survey are honestly too much to put into print. Some make us laugh. Some make us cringe. Some are cryptic. Most are serious. We appreciate them all. Below are some highlights from our survey results this week. Some of the comments that we can share with you are also included, in italics, in the buyers' own words, with minimal editing on our part.

Final thoughts

Unless you've been under a rock, you know by know that Nucor's published HR price for this week is $760 per short ton, down $65/st from the company’s $825/st a week ago. I could use more colorful words. But I think it’s safe to say that most of the market was not expecting this. For starters, US sheet mills never announce price decreases. (OK, not never. It has come to my attention that Severstal North America rescinded a price increase back on Feb. 14, 2012. And it caused quite the ruckus.)