Final Thoughts

Final Thoughts

Written by John Packard


The spread between hot rolled and cold rolled/coated steels continues to be at dangerous (my opinion) levels. The U.S. steel industry has been systematically “building a dam” (Lewis Leibowitz words) around this country in order to prevent what they call unfairly subsidized and unfairly traded plate, hot rolled, cold rolled, galvanized and Galvalume steels. The combination of restricting domestic production with the close-down of the hot end (steelmaking) at AK Steel Ashland and US Steel Granite City along with the affirmations of dumping being reported by the U.S. Department of Commerce has taken U.S. steel prices out of sync with the rest of the world. The domestic mills are getting short term benefits but, the long-term consequences could be quite a different story.

“The high domestic pricing is causing our customers to look offshore for their products and you can’t blame them. We can offer the best service and delivery but when offshore goods are 25% to 30% below our costs, we can’t compete.” This quote was left behind by a manufacturing company as they participated in our mid-July steel survey. Our Sentiment Index high optimistic trend has been broken and we will have to wait and see if there are long-term consequences to the building of the dam without balancing the competitiveness of the domestic manufacturing industry.

We believe our Sentiment Index is a forward looking indicator and it has peaked and begun to become more pessimistic. Don’t get me wrong, Sentiment is still well within the optimistic range of the index only not as high as it was two and four weeks ago.

Next week we will report some of the thoughts of one of our keynote speakers, Dr. Alan Beaulieu of the Institute for Trends Research. ITR is picking up both positive and negative economic data. We will give you his thoughts as to what direction he believes the market will go from here and, of course, those who will be attending our 6th Steel Summit Conference will get his detailed analysis of both the economic and political situation – which should be quite interesting by the end of August…

Tomorrow (Friday) we will produce our Service Center Apparent Excess/Deficit forecast and analysis as well as provide our Power Point presentation on our flat rolled steel market trends analysis from this week. Our Premium members should look for that on Friday afternoon. If you would like more information about how you can upgrade from our Executive level membership to Premium please send us a note: info@SteelMarketUpdate.com and we will do our best to convince you to upgrade…

Registrations continue to be quite strong for the Steel Summit Conference. We still have room to add more attendees. Go to www.SteelMarketUpdate.com for more details about the conference, speaker bio’s, costs and how to register. We are now only 38 days away!

As always your business is truly appreciated by all of us at Steel Market Update – and, we hope to see all of you in Atlanta!

John Packard, Publisher

 

 

Latest in Final Thoughts

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.

Final thoughts

Unless you've been under a rock, you know by know that Nucor's published HR price for this week is $760 per short ton, down $65/st from the company’s $825/st a week ago. I could use more colorful words. But I think it’s safe to say that most of the market was not expecting this. For starters, US sheet mills never announce price decreases. (OK, not never. It has come to my attention that Severstal North America rescinded a price increase back on Feb. 14, 2012. And it caused quite the ruckus.)