• Skip to main content

    Analysis

    July 27, 2016

    Final Thoughts

    Written by John Packard

    I have been receiving a large number of calls asking my opinion about steel prices and specifically can steel prices remain at the current levels for an extended period of time. The financial community is convinced that the numbers will come down over the next month to two months and that we will see mid $500’s hot rolled by the end of the year. I am being forwarded articles about the weakening of the automotive sales (which is different than production numbers) and that Chrysler will no longer manufacture cars in the United States beginning next year.

    I don’t disagree that there will be pressure building and the question will be what will demand be for all of the market segments as we move into 4th quarter and into next year. This will be one of the areas covered in our Steel Summit Conference and we have some big guns discussing the subject: Chris Oakley, Vice President and Regional Manager for the Federal Reserve Bank of Atlanta and Alan Beaulieu of the Institute for Trends Research. They are much better suited than I to make prognostications.

    John Packard

    Read more from John Packard

    Latest in Analysis

    Market chatter: Supply, not price, dominates steel buyers’ concerns

    On Monday and Tuesday of this week, SMU polled steel buyers on an array of topics, ranging from market prices, demand, and inventories to tariffs, imports, and evolving market events. We are sharing a selection of the comments we received below, in each buyer’s own words. Before diving in, we reviewed all the responses collected and compiled these key takeaways: Respondents overwhelmingly anticipate further increases. Buyers cite limited supply, mill delays, low inventories, and steady-to-strong demand. Most say demand is generally stable to improving, with some purchasing driven by fears of higher prices or unavailable material rather than stronger underlying consumption. Most respondents report faster inventory turnover, while shortages are constraining sales and, in some cases, prompting customer allocations. Buyers increasingly see imports as a way to secure scarce material, though domestic-origin requirements, delivery timing, and pricing risks remain obstacles.

    Sheet prices surge as ’26 market squeeze spills into ’27

    Sheet prices soared this week as market participants increasingly predict that the strong market characterizing 2026 will stretch well into 2027. And with extremely limited spot availability, mills that have spot tons to sell are charging a significant premium, they said. The result: Sheet prices saw their highest week-over-week gains since March 2025, according to SMU's pricing records. That's when President Trump shocked the market by expanding Section 232 tariffs to cover traditional US allies such as Canada, Mexico, and the EU.

    Ferrous scrap prices seen rising in November

    Most SMU scrap sources are predicting a stronger scrap market for November. The increase in prices is generally thought be $20-30 per gross ton (gt) in most districts. However, there are differences of opinion about the upcoming price settlements. SMU spoke with a trading source in the Great Lakes region who told us mills in the Eastern Ohio and Western Pennsylvania regions are short on scrap. At least one buyer is offering to buy scrap at a $30/gt increase from October levels. He said most dealers have elected to wait to see where things settle before making commitments.