Final Thoughts

Here are some of the companies who have registered to attend our conference over the past few days: Laphen-Hickey Steel, Big River Steel, Platts, Worthington Steel, CRU, Bull Moose Tube, Bar Steel, MiTek, Steel Technologies, Monarch Materials, Leeco Steel, The Bradbury Group, Sheffield Steel, Cowen & Company, Reliance Steel & Aluminum, Coilplus Texas, Goodman Manufacturing, California Steel Industries.

I received a call from the head of purchasing for a large service center and we talked about the lack of foreign hot rolled offers into the United States. Turkey, Egypt, Argentina were some of the countries mentioned but the tonnage and prices were far from being outstanding. One of our Turkish contacts recently told us offers into the east coast were around $540 per ton which is not that attractive to buyers unless they have negative domestic freight considerations. For those of you who do not buy hot rolled there is not as much being offered out there by foreign sources as you might think. This is helping to keep HRC prices stuck in the low $600’s.

I also spoke with a number of steel mills today and they are telling me there is no advantage to offering cheaper prices because either the orders are not there or, they (the mills) feel that buyers will have to buy due to their low inventories and it is only a matter of time and the mills are willing to wait.

AK Steel announced earnings today and one of the things their CEO, Roger Newport was asked was about the possibility of restarting the hot end at Ashland. He told Timna Tanners, “As for the Ashland restart, it’s a very complicated kind of discussion. It’s sustained levels of profitability is what we’d want to see in order to restart that facility and that has to do with spot prices, import level, demand for our products, overall world economy, where are the raw material prices headed, all of those things really factor in. And so, while we’ve seen some positive signs since we’ve temporary idled it, it hasn’t changed, I would say, materially and given us the indication that it’s consistently going to be now different that would force us to be in a position to start that up at this point. So we’re continuing to evaluate that.”

The AK Steel CEO will be one of our keynote speakers at this year’s Steel Summit Conference (and Timna Tanners of Bank of America Merrill Lynch will also be a presenter).

US Steel announced a small loss ($46 million) during the 2nd Quarter 2016. The mill will have an earnings conference call tomorrow with analysts and we will have our take on the earnings and call in Thursday evening’s newsletter (with luck it will be on the website tomorrow night for our members to review).

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

John Packard, Publisher