Final Thoughts
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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
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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?
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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.
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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.
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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).
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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!