Final Thoughts
Final Thoughts
Written by John Packard
January 13, 2017
A special thank you to the companies who have stepped up early to be sponsors at this year’s Steel Summit Conference: Our Conference Sponsor – Pacesetter as well as our two Corporate Sponsors – Bank of America and Mill Steel. We also have one break sponsor at the moment – Kenwal and we have two coffee sponsors – Magic Coil Products and Alliance Steel.
We do have sponsorship and exhibition space available on a first come, first served basis. Please contact either Ray Culley (Ray.Culley@SteelMarketUpdate.com) or myself at John@SteelMarketUpdate.com if you have an interest in becoming a sponsor or exhibitor at this year’s event in Atlanta at the end of August. Details about sponsorship/exhibition space and about the conference are available on our website. I will be traveling over the next 10 days. I am available by email or on my cell phone: 770-596-6268. If you have a short-term need, question about the website, would like to pay an invoice or become a new customer you can do so through Brett Linton at 706-216-2140 or Brett@SteelMarketUpdate.com.
On the 24th and 25th SMU will conduct our next Steel 101 workshop in Huntsville, Alabama. As part of the workshop we will tour the Nucor Decatur steel mill. I know our team is looking forward to visiting Decatur and interacting with the Nucor team.
We are working on the exact date of the Steel 101 workshop to follow the Huntsville dates. We do know we will be working with North Star BlueScope in Ohio. I am hopeful that we will have the dates ironed out over the next few days (late March-early May time frame).
This will be another busy week in the steel industry. MSCI data is due out this week. We will participate in our monthly galvanized steel conference call with the HARDI wholesalers. Donald Trump will be sworn in as the new President of the United States on Friday. We are also conducting our flat rolled steel market trends analysis beginning on Monday morning at 7:30 AM ET. If you receive an invitation please take a moment to click on the button and provide us your thoughts about the market.
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?