Final Thoughts

Final Thoughts

Written by John Packard


The scrap market created a lot of buzz over the past two months that resulted in, so far, two domestic steel mill price increases totaling $60 per ton ($3.00/cwt). I got a note over the weekend from one of the national companies who told me about the scrap markets, “There is a sense the market is overextended at this point, especially on prime grades.  I’m not sure we’ll necessarily see a significant pullback in April given ore-based metallics prices and robust demand, but a pause and/or slight pullback would not be surprising.”

The scrap markets ended up as follows:

HMS (heavy melt) = $275-$290 per gross ton

Shredded scrap = $315-$330 per gross ton

Prime grades (busheling) = $390-$415 per gross ton

Pig iron has limited availability at $380-$395 per metric ton, New Orleans (NOLA).

At the FMA Conference in New Orleans last week I asked SMA President, Philip Bell about the high tonnage of cold rolled and coated products still coming into the United States. He responded to my question and part of his answer referenced the amount of money the domestic mills are making on those two products as a reason why he did not believe there would be any more trade cases filed. Philip Bell will be participating in our 7th SMU Steel Summit Conference on August 28-30, 2017.

A note about our Steel 101: Introduction to Steel Making & Market Fundamentals workshop. We are sold out for our April 11-12, 2017 workshop in Toledo, OH and we have a wait list building. The workshop coming up after Toledo will be in Fontana (Los Angeles), California and our tour will be of the California Steel Industries steel mill. We will advise the exact dates as we are working on hotels right now but we are aiming for late June to no later than mid-July 2017. We hope to have all the details on our website by the end of this week. If you have any questions feel free to contact us at: info@SteelMarketUpdate.com.

I will have more regarding a couple of the presentations from last week’s FMA/ASD Conference later this week. I am waiting for the Power Point presentations from a couple of the speakers.

I will be in the office all week this week and I can be reached at: John@SteelMarketUpdate.com or 800-432-3475.

As always, your business is truly appreciated by all of us here at Steel Market Update.

John Packard, Publisher

Latest in Final Thoughts

Final thoughts

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.

Final thoughts

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?