Final Thoughts
Final Thoughts
Written by John Packard
June 20, 2016
Two steel mills announced price increases today. This is the beginning of the 6th round of increases since the first announcement in early December 2015. However, unlike past announcements this one just doesn’t “feel” the same.
We are not seeing a rush to buy (unless it was a special deal at much less than the number suggested by ArcelorMittal). We will be working on where demand is on flat rolled products but, our initial read of the market is demand is “decent” but not necessarily as strong as expected. This is something we will be working on in the coming days.
I did do a quick check with a couple of trading companies to see what offers are out there. There is a belief among some buyers that there is a flood of import coming but we are not seeing it. We are not aware of any hot rolled offers in the market at this moment. With the U.S. being the highest priced market in the world to not have at least a few HR offers is quite unusual.
Cold rolled is being offered out of Vietnam and Turkey around $660 ($33.00/cwt). We have heard rumors of $30.00/cwt Houston but I haven’t been able to confirm the source.
We heard Vietnamese .019 G30 galvanized was being offered at $750 per metric ton, Ex Vietnam. To put that into some perspective the $750/MT + $100/MT (freight/insurance, etc.) = $771 Net Ton ($38.55/cwt). If you were to take coating extras into account, .019” G30 at $4.20/cwt + $2.00/cwt thickness extra = $6.20/cwt ($124/NT) brings the pricing down to a $32.35/cwt base. The ArcelorMittal announcement today of $830 per ton base on galvanized ($41.50/cwt+$4.20 + $2.00 = $47.70/cwt or $954 per ton). The Vietnamese .019 G30 galvanized product is at least $183 per ton below AM price (and NLMK is even higher than AM)…
Of course the question really is, what will the price of .019 galvanized be in January 2017?
A special thank you to Cargill which came on this week as a sponsor to our upcoming Steel Summit Conference in Atlanta. Cargill joins Pacesetter, Big River Steel, Mill Steel, Tennessee Steel Haulers, Steel Dynamics, Magic Coil Products, Alliance Steel and Kenwal as our other sponsors. We do have a couple of spots left should you be interested in becoming a sponsor or an exhibitor. Contact me at info@SteelMarketUpdate.com and we will provide more information as to what remains.
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
Sure, demand isn’t as good the market had hoped it would be earlier this year. But assuming it doesn’t fall of a cliff, buyers will have to restock at some point. And that might give domestic mills enough leverage to raise prices again.
Final Thoughts
While I would anticipate market sentiment to pivot and improve if all the questions around tariffs were answered, that still leaves us with a few other factors.
Final Thoughts
Let's see what SMU survey respondents are saying about Trump's tariffs.
Final Thoughts
The Tariff Town amusement park ride shows no signs of slowing down.
Final Thoughts
Cliffs came tantalizing close to buying U.S. Steel in 2023. There were rumors in 2024 that Cliffs might buy NLMK USA before it ultimately purchased Stelco for $2.5 billion in November of last year. Who would have thought that asset sales would have been the focal point of discussion just six months later?