Final Thoughts

August 8, 2016

I did trade emails with trade attorney Lewis Leibowitz regarding the International Trade Commission (ITC) commissioners. I wanted to know if the new president of the United States could make wholesale changes with the commissioners and change the balance of the rulings being made on steel trade cases and others. Mr. Leibowitz told us, “The ITC Commissioners are appointed for 9-year terms by the President with Senate confirmation. No more than three can be from one political party. Unless there is resignation or death, it is unlikely that any single President will appoint a majority of the Commissioners.”

My recommendation to steel buyers is don’t over-react to the latest hot rolled AD/CVD final determination announcement. It will take a few days to a couple of weeks before things will get sorted out and we have a better look at the competitive landscape. We have heard that Turkey and Hyndai (Korea) will continue to ship. Our expectation is Japan will replace Australia at Steelscape (just our opinion, we have no inside information on the subject at this time). USS/POSCO is the big question mark as the 60 percent margins were a huge surprise. We have been asking who can replace the 900,000 to 1,000,000 tons the mill will need. US Steel could step up but they would probably have to reopen Granite City (again our opinion with no inside information). Freight is a huge issue.

A trading company made a comment to me this evening about the west coast market and about slabs. This trader’s opinion was that the U.S. steel mills (especially USS) may go after imported slabs. Especially with the easier version of “injury” having been passed by the US Congress last year. This trader believed that Nucor is against slabs and US Steel may feel that way with USS/POSCO having to compete against them at California Steel.

The other comments being made are the “what if’s” – what would happen if the domestic steel mills go after Vietnam (CR and coated), Brazil (coated), Turkey (CR and coated) and South Africa (coated)? The Vietnamese certainly aren’t doing a very good job of “laying low” and not putting a target on their back… We are also hearing that Brazil is shipping some of the tonnage originally displaced when their mill in Brazil lost it’s blast furnace. The tonnage is being reported as being at very low prices compared to current domestic numbers.

In the past few days we have seen registrations continue for our 6th Steel Summit Conference in Atlanta at the end of this month. We got new registrations from: Uttam Galva, Duferco, Metal One, Mitsui, Majestic Steel, Cargill, Vicwest Building Products, Alumaster and ITW. Registrations are over 380 people and we should be very close to 400 people (or more) when the conference opens in 19 days. You can find more information about the program, costs and registration on our website: www.SteelMarketUpdate.com. Or, you can contact our office at 800-432-3475 (or, info@SteelMarketUpdate.com).

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

John Packard, Publisher