Final Thoughts
Final Thoughts
Written by John Packard
March 11, 2016
We have added the 2016 Steel Summit Agenda to our website. We continue to tweak the program as we search for the best speakers and subjects that are key to those attending our conference at the end of August (August 29-31, 2016) in Atlanta. We have an exceptional agenda already with keynote speakers representing the economy (Alan Beaulieu of the Institute for Trends Research and Chris Oakley of the Federal Reserve Bank of Atlanta) as well as steel mills (Mark Millett, CEO of Steel Dynamics and Roger Newport, CEO of AK Steel) as well as commodities (Lourenco Goncalves, CEO of Cliffs Natural Resources). We will continue to have steel and commodity forecasts from Timna Tanners (Bank of America Merrill Lynch) and John Anton (IHS Global Insight) and we will look at various steel intensive market segments as the industry plans for 2017 and beyond. Registration for individuals as well and for groups is open on our website. If you have any questions or need any help, please contact us at info@SteelMarketUpdate.com or by phone: 800-432-3475.
As was mentioned in an earlier article in this issue, the hot rolled AD preliminary determination should be announced sometime late in the afternoon on Tuesday of this week. I spoke with the representative of one of the mills involved who told me that their mill has been very careful not to “dump’ steel or sell steel in the United States below their own domestic prices. Even so, this particular mill is not quoting prices for hot rolled coil until the preliminary AD determination has been posted by the US Department of Commerce. Other mills are not so cautious and continue to ship material confident that their mills are not selling product below their cost to manufacture or below their home market pricing. None-the-less, this ruling is important and could help the mills keep momentum on their side or, it could weaken their position. We will have to wait and see how it goes and how buyers react.
I want to welcome our newest member companies and I want to let them know (and remind those companies who have been with us for awhile) that we encourage questions, comments and suggestions. This is one of the ways we can gauge that we are writing about the right subjects and that we are providing enough detail to keep our readers engaged. I can be reached at: John@SteelMarketUpdate.com or by phone at 800-432-3475.
Your business is truly appreciated by all of us here at Steel Market Update – please tell your friends about us.
John Packard, Publisher
John Packard
Read more from John PackardLatest in Final Thoughts
Final Thoughts
We just wrapped another Steel 101 Workshop, where you take what you learned in the classroom into the steel mill.
Final Thoughts
Steel equities and steel futures fell hard after news broke earlier this week that the US and Mexico might reach an agreement that would result in the 50% Section 232 tariff coming off Mexican steel. The sharp declines didn’t make much sense, especially if, as some reports indicate, Mexico might agree to a fixed quota. They didn't make sense even if steel flows between the US and Mexico remain unchanged.
Final Thoughts
Even before the news about Mexico, I didn’t want to overstate the magnitude of the change in momentum. As far as we could tell, there hadn’t been a frenzy of new ordering following President Trump’s announcement of 50% Section 232 tariffs. But higher tariffs had unquestionably raised prices for imports, which typically provide the floor for domestic pricing. We’d heard, for example, that prices below $800 per short ton for hot-rolled (HR) coil were gone from the domestic market – even for larger buyers.
Final Thoughts
I want to draw your attention to SMU’s monthly scrap market survey. It’s a premium feature that complements our long-running steel market survey. We’ve been running our scrap survey since late January. And over just that short time, it’s become a valuable way not only for us to assess where scrap prices might go but also to quantify some of the “fuzzy” indicators - like sentiment and flows - that help to put the price in context.
Final Thoughts
I think there is an obvious case for sheet and plate prices going higher from here. That’s because, on a very basic level, the floor for flat-rolled steel prices, which is typically provided by imports, is now significantly higher than it was a week ago.