Final Thoughts
Final Thoughts
Written by John Packard
August 15, 2016
I heard this evening that Turkish hot rolled for September shipment was recently booked at an average price of $25.50/cwt CIF, Duty Paid ($510 per ton). Latest offer on Mexican hot rolled $26.50/cwt ($530 per ton) and cold rolled at $31.50/cwt ($630 per ton). The hot rolled numbers make sense and are reasonable against domestic numbers that are below $600 per ton. The cold rolled numbers are out of whack not because the foreign steel is being dumped but rather due to the spread between domestic hot rolled and CR/Coated base prices (over $200 per ton).
I have been speaking with all of the presenters for this year’s Steel Summit Conference. Everyone is fired up for a great conference and the timing appears to be just about right as we try to figure out what the rest of the year holds for the industry as well as calendar year 2017.
I spoke to both Jaynie Smith and Diane Thielfoldt who are the speakers in the late afternoon on Tuesday and Wednesday. I hope that many of our attendees will take the opportunity to see and hear two exceptional speakers and programs. I spoke to Dr. Alan Beaulieu of the Institute for Trends Research and he told me he is coming in early to catch Jaynie’s program on Creating a Competitive Advantage. Diane will speak about the multi-generational workforce. If your company has Millennials in the workforce you NEED to attend this program…
Our Steel 101 workshop is a little more than 50 percent full a little more than 3 months before the program. I have mentioned this before as this will be a special workshop as we tour the brand new Big River Steel literally as it begins to melt scrap for the very first time. You can find more about the workshop on our website: www.SteelMarketUpdate.com or you are welcome to contact me with any questions you might have: John@SteelMarketUpdate.com or 800-432-3475.
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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Final Thoughts
We just wrapped another Steel 101 Workshop, where you take what you learned in the classroom into the steel mill.
Final Thoughts
Steel equities and steel futures fell hard after news broke earlier this week that the US and Mexico might reach an agreement that would result in the 50% Section 232 tariff coming off Mexican steel. The sharp declines didn’t make much sense, especially if, as some reports indicate, Mexico might agree to a fixed quota. They didn't make sense even if steel flows between the US and Mexico remain unchanged.
Final Thoughts
Even before the news about Mexico, I didn’t want to overstate the magnitude of the change in momentum. As far as we could tell, there hadn’t been a frenzy of new ordering following President Trump’s announcement of 50% Section 232 tariffs. But higher tariffs had unquestionably raised prices for imports, which typically provide the floor for domestic pricing. We’d heard, for example, that prices below $800 per short ton for hot-rolled (HR) coil were gone from the domestic market – even for larger buyers.
Final Thoughts
I want to draw your attention to SMU’s monthly scrap market survey. It’s a premium feature that complements our long-running steel market survey. We’ve been running our scrap survey since late January. And over just that short time, it’s become a valuable way not only for us to assess where scrap prices might go but also to quantify some of the “fuzzy” indicators - like sentiment and flows - that help to put the price in context.
Final Thoughts
I think there is an obvious case for sheet and plate prices going higher from here. That’s because, on a very basic level, the floor for flat-rolled steel prices, which is typically provided by imports, is now significantly higher than it was a week ago.