Final Thoughts
Final Thoughts
Written by John Packard
August 1, 2016
Scrap trading has been slow to develop in all but the Detroit area mills. The domestic steel mills are trying to reduce the spread between shredded scrap and prime grades of scrap (busheling and bundles) which in some cases has expanded to $70 per gross ton. Scrap guru Michael Marley reported this afternoon that the domestic mills are trying to shave $30 per ton off the spread. However, prices did settle in Detroit where prime grades were down $10 per gross ton while there was no change in obsolete grades.
Scrap is important as steel buyers watch the changes and use them as a hint as to what direction steel prices should go. If the mills get reductions of $20 per gross ton or more, look for buyers to demand reductions in their base prices. A service center executive told us that one of his mill sources was positioning him for a sideways move on scrap in August. However, we were told if there is a reduction in scrap their company would be asking for relief.
During my conversations with buyers today I heard a number of times concerns about the spread between hot rolled and cold rolled and coated pricing. One of the domestic mills we spoke with reported that they were seeing more competition especially on cold rolled. The mill reported cold rolled prices from foreign sources around $600 per ton ($30.00/cwt) at a time when domestic base prices are averaging $41.00/cwt.
A couple service centers wondered if the Europeans would begin taking notice and begin shipping more cold rolled and coated to the U.S. because of these attractive spreads in the numbers. In looking at the cold rolled license data report which was updated this evening the following European countries are exporting 5,000 net tons or more of CR to the United States during the month of July: Sweden, Turkey and Germany. Also of note is the 5,500 tons of CR exported by Hong Kong during the month of June… Vietnam was the largest CR exporter during July with 36,000 tons of license requests. Vietnam was followed by Canada and Mexico.
We continue to take registrations for our 6th Steel Summit Conference and we are closing in on 400 attendees. I believe our conference will be the largest gathering of flat rolled people in North America. If you would like to add your name to the list you can do so on our website: www.SteelMarketUpdate.com or by contacting our office: 800-432-3475. There are only 26 days to go…
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John Packard
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