Final Thoughts
Final Thoughts
Written by John Packard
March 8, 2017
During one of the breaks from the FMA/ASD/Tolling Processing meetings I am attending in New Orleans, I met with the head of commercial for one of the domestic steel mills. We had an interesting conversation about the negativity in the market not being backed up by actions. He was telling me that a number of his customers are afraid of prices moving lower while at the same time they are telling him that they have record sales/shipments. He was of the opinion that many of his customers are short steel and could have some issues come May, June and July.
When I asked him about their pricing position after the increase announcements having been made by a few steel mills, I was told they were waiting for their sales people to return from a couple of conferences where they normally get indications of what to expect from their contract business. If the orders come back as strong as expected they will be aggressive with their spot pricing. However, over the next few days they may chose to sit and wait.
I listened to a presentation this morning about the automotive industry from Bernard Swiecki of the Center for Automotive Research (CAR). They are forecasting automotive to remain at, or close to, 17.5 million units for a number of years. He said the automotive industry has “peaked” but there is no expectation for a reduction from what have been all-time highs. Plus, he pointed out the weakness was in small cars which use much less steel than crossovers, SUV’s and trucks. So, the negatives being reported elsewhere are unfounded at this point.
We will have a report based on comments made by Dr. Chris Kuehl of Armada Corporate Intelligence yesterday and earlier today. Dr. Kuehl will be a keynote speaker at our 7th SMU Steel Summit Conference in Atlanta at the end of August. One more reason to go on our website and register…
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John Packard, Publisher
John Packard
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