Final Thoughts
Final Thoughts
Written by John Packard
April 13, 2016
I will be doing an article in Sunday evening’s newsletter about the AISI capacity utilization numbers. The AISI produces their “estimate” of steel production and the percentage of capacity utilization based on 50 percent (or fewer) of the mills reporting production data. I have considered not publishing the data at all because, in my opinion, the numbers are more fiction than fact. Especially when considering sheet or flat rolled products which today are much closer to 95 percent than the 72 percent reported by AISI. One reason why their number is so off is due to long products being included in the total calculation. More on this subject on Sunday evening.
Nucor and ArcelorMittal have come out with spot pricing to their customers with hot rolled at $26.00/cwt. I am hearing that NLMK USA is also at $26.00/cwt ($520 per ton) while SDI and North Star Bluescope are at $25.50/cwt ($510 per ton).
There is not much foreign hot rolled being offered into the U.S. market. When there is an offer the numbers are very close to domestic offers so the purchasing advantage to foreign is much less unless your company is a believer that prices will be much higher in August than they are today.
We understand US Steel has been buying hot rolled from SDI and possibly Nucor and shipping it into Granite City. With their books being essentially full, with scrap prices rising (which affects purchases from other mill suppliers) and with foreign appearing to be less of an issue in the coming months, my opinion is USS may consider bringing back one of their blast furnaces at Granite City. We will need to watch this carefully in the coming days and weeks. I expect we should know something by the time USS releases their earnings later this month.
For those interested in sending someone to our next Steel 101 workshop in Sylvania, OH (just outside of Toledo) we only have a few spots left before the workshop will need to be closed. You can find more information on our website and you can register there or by contacting our office: 800-432-3475.
Our next Steel 101 workshop will be in early November in Memphis, Tennessee and will include a special once in a lifetime tour of a brand new steel mill – Big River Steel. We will most likely expand this workshop to 2.5 days (from 2 days) in order to get as much information about the mill as possible to our attendees. We have already started a reservation list of those interested in sending employees. More details to come.
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
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?
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!