It is Super Bowl Sunday so I am going to keep this as short as possible. Everyone needs to remember that I lived in Atlanta for 34 years, having just moved permanently to Florida a little more than a year ago. Let’s hope for a good game and great commercials… Go Falcons!
As you know Ray Culley and I are working feverishly on the 2017 version of the SMU Steel Summit Conference. We are scouring the country for the best subject matter to broach as well as the best speakers. We invited Dan DiMicco to represent the Trump administration but we learned over the weekend that he will not be able to join us this year. We will continue to burn the midnight oil looking for the best way to address the new elephant in the room…politics and steel go hand and hand.
We want to do a section on the manufacturing view of the industry. I am looking for a few company CEO’s or VP’s that are able to discuss trade issues, manufacturing issues and to forecast the markets that they serve. If your company is interested, please contact me at: John@SteelMarketUpdate.com or 800-432-3475. I will most likely run this as a question-answer panel and not as formal presentations as we want to get the most out of the program. We are all ears and willing to discuss options and opportunities. If you know someone at your company or elsewhere that is an excellent communicator, please send me their details and we will take it from there.
I always listen to our past attendees and take their suggestions into consideration. If there is a subject that you think needs to be broached please let me know. Again, I am all ears.
Registration for the 7th SMU Steel Summit Conference is open and available online or you can contact Diana/Alison in our office for invoices or to register direct through our office. Their number is 772-932=7538.
We also have another Steel 101: Introduction to Steel Making & Market Fundamentals workshop coming up in Ohio in April. On April 11-12, 2017 we will conduct our workshop at the Radisson Hotel at the University of Toledo. We will also tour the North Star BlueScope steel mill as part of our workshop. Details and registration are on our website or you can contact our office at 772-932-7538 for more information, request an invoice, etc.
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
Post Script: OUCH! As I told my son who was texting me during the football game no matter how far in front you are the game is not over until the last second has ticked off the clock. Congratulations to New England as they were the better team for the entire 60 minutes (and, of course, overtime).
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What are some “Black Swans” to watch out for? With the war in Ukraine entering its third year, your mind might understandably move to conflicts overseas. Here is one closer to home to consider: US trade relations with Mexico taking a turn for the worse. I mention that because the Office of the United States Trade Representative (USTR) dropped a (virtual) bombshell earlier this month.
Domestic prices have been sliding since the beginning of the year, and I don’t see any obvious reasons why the slide might stop this week. But let’s put the timing of a bottom aside for a minute. The question among some of you seems to be whether we’ll see another price spike, or at least a “dead-cat bounce,” before the typical summer doldrums kick in.
I’ve had discussions with some of you lately about where and when sheet prices might bottom. Some of you say that hot-rolled (HR) coil prices won’t fall below $800 per short ton (st). Others tell me that bigger buyers aren’t interested unless they can get something that starts with a six. Obviously a lot depends on whether we're talking 50 tons or 50,000 tons. I've even gotten some guff about how the drop in US prices is happening only because we’re talking about it happening.
We’ve all heard a lot about mill “discipline” following a wave of consolidation over the last few years. That discipline is often evident when prices are rising, less so when they are falling. I remember hearing earlier this year that mills weren’t going to let hot-rolled (HR) coil prices fall below $1,000 per short ton (st). Then not below $900/st. Now, some of you tell me that HR prices in the mid/high-$800s are the “1-800 price” – widely available to regular spot buyers. So what comes next, and will mills “hold the line” in the $800s?
Everyone knows the old saying that “a picture is worth a thousand words.” Just because it’s a cliché doesn’t mean that it’s wrong. A lot of inked has been spilled trying to figure out why prices are falling now. I thought it might be as simple as this: Market dynamics in the fourth quarter (UAW strike, companies buying ahead of an anticipated post-strike price spike, etc.) pulled forward restocking activity that typically happens in the first quarter.