Final Thoughts
Final Thoughts
Written by John Packard
June 3, 2016
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
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!