Final Thoughts
Final Thoughts
Written by John Packard
April 4, 2016
NLMK USA was the first mill to raise prices, going up $40 per ton. I am hearing comments from both sides on whether the price increases are a good or bad thing. My personal opinion is prices got a little “over-done” last year and dropped too low. A hot rolled number closer to $500 may make more sense and hopefully a healthier steel industry. With China’s hot rolled market around $380 per metric ton and prices rising around the world, there may be longer “legs” to this market than many believe possible. I wouldn’t count on a big drop in prices over the next 60 days.
There are definitely pockets of strength out there. With the milder than normal winter we have seen the metal building and other construction segments of the economy doing much better than forecast. This is one of the reasons why you are seeing a strong galvanized and Galvalume order books. Are orders that would have been in the system for 2nd or 3rd quarter getting moved up?
We are hearing of a couple of outages for maintenance coming in June. We have heard North Star Bluescope will take 3-5 days outage as will Nucor Gallatin.
We spoke with a couple of our automotive service center sources who report all is still going well with the industry (and we are all keeping our fingers crossed it continues).
A construction related manufacturing company warned us that their business was up 30 percent over the first three months 2016. However, the buyer warned us that the market hasn’t gone up by 30 percent. Sooner or later there will be a correction.
We heard from two experienced buyers that they have a concern about the number of inexperienced buyers who didn’t live through 2004 and 2008 and don’t have those experiences to fall back on. There could be some companies who over react to the tightness in the markets. The experienced buyers we spoke with today told us they continue to order for orders on the books and not speculate on what “may” happen.
SMU has been approached a number of times over the past month to see if we will offer our Sales Training Workshop to an open audience. If your company has interest in sending sales or purchasing people to a workshop focused on sales and purchasing techniques for the service center/steel mill industries please contact me at: John@SteelMarketUpdate.com.
We still have a number of seats available for our next Steel 101 workshop which will be held just outside of Toledo on May 17-18 and will include a tour of the North Star Bluescope steel mill. Registration can be done on our website (www.SteelMarketUpdate.com) or through our office at 800-432-3475. Our full program is on our website. If you have any questions please contact us at: Info@SteelMarketUpdate.com.
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John Packard
Read more from John PackardLatest in Final Thoughts
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!