Final Thoughts
Final Thoughts
Written by John Packard
May 6, 2016
A quick note to those who will be attending the Chicago Metals Industry Boy Scout Dinner on Thursday of this week. I will be there as well. If you want to get a moment to chat send me an email or text. My email is John@SteelMarketUpdate.com.
While communicating with a service center executive late on Friday I was told:
Some other things that are bugging me right now: 1) A number of suppliers have scheduled maintenance coming up. 2) For the most part, mills are shipping on-time right now and managing their order book. If there is any slip in on-time delivery, there’s no inventory out there to cover it. That could be a source of a lot of frustration this summer.
We need to watch production carefully as unplanned outages such as the North Star BlueScope explosion and fire (unknown right now if production will be affected) could have ripple effects through the industry. Especially, as the service center pointed out above, is there is no build-up in inventory to provide a cushion.
We encourage our readers (and everyone in the industry for that matter) to attend our 2016 Steel Summit Conference. I have a feeling there will be much to discuss about the industry and issues affecting manufacturing, distribution and others in the industry come August 29th through the 31st. If you have any questions about the conference that you are unable to get answered on our website please feel free to contact our office at: 800-432-3475 or by email: 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
Getting back to the price increases I mentioned at the top of this article, to what extent are they aimed at raising prices and to what extent are they aimed at stopping the bleeding that was happening in the second half of May, before President Trump announced the 50% tariff?
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.