Final Thoughts

Final Thoughts

Written by John Packard


I received a couple of notes from trading companies thanking me for my article on Thursday evening (The Sky is NOT Falling… at least not yet) as I tried to put into context some of the pricing available for foreign steel, correct some misinformation and look at the bigger picture. Even as questions arise about demand, as long as supply is constrained and inventories are balanced or less than balanced, the domestic mills will have the wind to their backs.

Even so, no one should become complacent and accept that the status quo will exist for the rest of this year or even into next year. There always seems to be something to drive the train off the tracks and I expect it will happen to this cycle as well.

Scrap prices – at least the obsolete grades of scrap – are falling across the country. Dealers are telling SMU that this may be a single month event as shredded scrap may have to fill the holes left behind from too little prime grades as we move into auto shutdown schedules. The headlines will be about the price drops on the east coast but, in the Midwest and South where most of the steel is made the price drop is much less notable.

Right now it is not in the steel mill’s interest to have scrap prices tank. Much lower scrap prices can put pressure on steel prices although, I don’t think they will during the month of June.

I included one of the Premium level articles we produced late last week. The article on Key Market Indicators and the Construction Put in Place (CPIP) article which was produced at the same time, provide a glimpse into why we continue to be bullish on the steel industry. Take a few moments to read the KMI article and if you would like more information about upgrading to a Premium level customer please shoot me an email and I will provide you more details: John@SteelMarketUpdate.com.

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

John Packard, Publisher

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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.