Final Thoughts
Final Thoughts
Written by John Packard
November 28, 2016
As of late this afternoon www.Kitco.com was reporting zinc spot pricing around $1.22 per pound. Zinc recently reported prices not seen in the past 9 years and those of you buying galvanized and Galvalume steels need to be aware of how zinc is trading. The U.S. steel mills published new extras just as zinc pierced through the $1.10 mark. If zinc climbs much higher (and stays there) there could be further movement in GI extras.
Also, be aware that the .060″ G90 benchmark used by SMU, CRU and others is now being quoted based on the $9 per ton higher extra.
I expect the rest of the domestic steel mills to follow the ArcelorMittal lead and participate in this the 4th price increase since prices reversed course in late October 2016. We have seen prices move from a low of $470 per net ton on hot rolled (average – we collected some numbers as low as $420) to our average of $550 today. Up +$80 in six weeks and for those buying at the low end the increase could be as much as +$130 over those same six weeks. We understand that most of the offers out there this week are $540-$580 and those will most likely move up $20 to $40 per ton in the next day or two.
There are some who think HRC will slow down once it hits $600 per ton and coated products break the $40.00/cwt barrier. The rationality being used is weak, sluggish or weakening demand. I am working on this subject and will publish what I find in Thursday evening’s edition of our newsletter.
Tomorrow we will publish another Premium supplemental issue with Key Market Indicators and Service Center Inventories Apparent Excess/Deficit articles. Both products are proprietary to Steel Market Update.
A note to those interested in attending our next Steel 101: Introduction to Steel Making & Market Fundamentals workshop which will be held in Huntsville, Alabama on January 24-25, 2017 and include a tour of Nucor Decatur. The workshop is currently within 3-5 spots of being considered sold out. If you are interested we recommend you register online or through out office (800-432-3475 or 706-216-2140).
A note on my travel schedule. I am in the office all day on Wednesday of this week. On Thursday and Friday I will be out of the office for most of the day. On Sunday I fly to Colorado Springs, Colorado to attend the HARDI conference where I am presenting to their galvanized steel group. I will return on Wednesday evening next week from CO. After that I am staying put through the end of the year.
Even if I am traveling I respond to my emails and I still want to hear from our readers. What do you think about the new price increase? Will it stick? Manufacturing companies what are you doing regarding taking business to China or elsewhere for production of parts? Anybody thinking of re-shoring products? What do you think about Trump and his quest to help the steel industry. Does his administration helping the steel mills end up costing us manufacturing jobs and our competitive edge?
You can email me at: John@SteelMarketUpdate.com
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John Packard
Read more from John PackardLatest in Final Thoughts
Final Thoughts
Will a US-UK meeting next week prove a harbinger of tariff deals to come, or will it be just another case of having the rug pulled from under us?
Final Thoughts
When will we see prime scrap become scarce as the worldwide transition to EAF melting increases, especially for HRC production? It's a question I've been asked a lot.
Final Thoughts: The hidden cost of analysis paralysis in the age of uncertainty
With US economic indicators all over the map, it’s no wonder the steel market has experienced a whole lot of analysis paralysis this year.
Final Thoughts
A recurring theme in conversations with some of you and in the comments submitted in our surveys is concerns about demand and uncertainty around tariffs. Where does SMU’s latest opinion polling on President Trump’s tariffs stand? Let’s take a look at the numbers.
Final Thoughts
I’ve been getting some calls lately from some of you who want to kick around ideas on where prices might bottom and when.