Final Thoughts
Final Thoughts
Written by John Packard
January 27, 2017
Please be advised that I will be traveling to Tampa, Florida and will be at the Port of Tampa Steel Conference on Monday and Tuesday of this week. I will return to my office on Wednesday. For those of you who have not been to a steel conference, the Port of Tampa is a good one that will not break the bank. Of course, if you only can go to one steel conference, I highly recommend our own Steel Summit Conference which will be in Atlanta, Georgia at the end of August (28th, 29th and 30th of August).
We are going to begin our early February flat rolled steel market analysis (survey) beginning at 8 AM ET on Monday, January 30th. We will send out approximately 630 invitations to people representing over 600 companies involved in the production, distribution, manufacturing or processing of flat rolled steel. The vast majority of the invitations focus on manufacturing and distribution which are the two largest buying segments for the steel mills. We will be asking questions about whether those in the industry think flat rolled steel prices have “peaked” or does the bull have room to run?
This coming week should be interesting (just like every other week in the steel industry). If something comes across your desk or, if you become aware of changes in the marketplace, please shoot me a note: John@SteelMarketUpdate.com
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.