Final Thoughts
Final Thoughts
Written by John Packard
November 4, 2016
Two more days and we will all (I hope) be able to breathe once again. This is the last Sunday before the election here in the United States when we will decide who will be President and, just as important, who will control the House and Senate. The world is watching so I hope that every one of our readers who is registered to vote does vote – even if you have to hold your nose as you pull the lever (or in the case of where I am in Florida, blacken the desired circle).
The Wall Street Journal reported today that the US Department of Commerce is going to move ahead with the circumvention investigation requested by the domestic steel mills. This will be an interesting investigation and could alter the way steel origination is found in the future. Right now, prior to any changes, rolling HR to CR or applying zinc to the surface of steel qualifies as “significant transformation” and changes the country of origin. The domestic mills are asking for that understanding to be abandoned in the belief that the Chinese are using Vietnam to evade (circumvent) the duties leveled against them by the U.S. Department of Commerce.
I got an email from Jacob Rogers who had recently joined Sioux City Foundry in a sales position after having previously worked in a different field. Mr. Rogers told us, “I wanted to send you a quick email to thank you as your “Beginning the steel sales process” Blog really made a difference for me and my vision. I have been in sales management and training for 16 years and recently decided to make a dramatic change in industries from the Wireless cellular world to the steel Fabrication and supply industry and so far I’ve loved the challenge of learning and understanding the ins and outs but I’ve always known the key essentials to a successful sales flow. I’ve coached and developed many back behind the sales flow model of the process being as important as the sale itself. But I have never sold anything or managed in the steel industry; reading your blog has taught be that there is no dramatic change up in the sales process its just a matter of learning and developing the proper process around the product and the customer base. Anyways didn’t want to right a long story but I appreciate your blogs and plan to read more.”
For those who don’t realize it, we have an abundant amount of free material in our website for sales people, purchasing people and those just interested in the steel industry. Take the time to look around. If you would like help in navigating our website contact Brett@SteelMarketUpdate.com.
Steel Market Update will roll-out a new sales/purchasing training workshop for the steel service center industry in the coming months. I have had two well-qualified people working on the project for some time and I think we are close to unveiling it to the public. We will concentrate on “Building Sales & Purchasing Relationships” as the two positions have much more in common than people may realize. Stay tuned for more information and look for our first class early next year. If you are interested in the program please feel free to contact me at John@SteelMarketUpdate.com or by phone: 800-432-3475.
We have added a large number of new accounts recently. I want to thank each and every one for investing your hard earned money into our product. We will work hard to earn and keep your trust as markets ebb and flow. I am especially pleased to see a steel mill from Taiwan join late last week. They told me in an email, “Your name has been famous in the market and your website has been very helpful for the business.” It is good to know that there are those outside of the U.S. who recognize the effort we put into providing quality market intelligence and analysis.
I also want to remind both our new and existing members that we are available should you have a question that you would like us to tackle. Many times the questions asked result in using doing a special article on the subject. To reach out you can send us an email to: info@SteelMarketUpdate.com or you can call us at 800-432-3475 (outside of the USA call 772-245-8630).
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
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.
Final Thoughts
We're about to hit 50% Section 232 steel tariffs. What could happen?