Final Thoughts
Final Thoughts
Written by John Packard
March 20, 2017
Galvanized steel buyers need to continue to watch LME zinc pricing as there are reports out there suggesting higher zinc prices as 2017 progresses and into 2018. This will be one of the subjects touched on during our 7th SMU Steel Summit Conference at the end of August. With the mills just having announced new extras my expectation is we are probably “safe” for at least three months. But, if you start to see zinc trading above $1.30 and as high as $1.40 per pound then be prepared for more changes.
We have finalized negotiations with our hotel in Ontario, California for our June 2017 Steel 101 workshop. The dates for the workshop are Thursday, June 22nd and Friday, June 23rd. We normally conduct our workshops on Tuesday and Wednesdays but we wanted to be able to see the re-heat furnaces and hot strip mill in action and the later part of the week worked best. It will also allow those coming from the Midwest and East Coast some flexibility in travel to and from the West Coast. It also provides an opportunity for those who would like to add a day or two to enjoy California to do so. Details about the workshop, costs and registration can be found on our website. If you have any questions please do not hesitate to ask: info@SteelMarketUpdate.com
We have 127 people registered for the SMU Steel Summit Conference with still 159 days to go (next Tuesday will mark the point when we will have 5 months to go). We are essentially 100 registrations ahead of last year’s pace when we saw 430 executives attending our 2016 SMU Steel Summit Conference. Our expectation is we will break our attendance record by at least 100 people if not more. So, I recommend registering early. For individual registrations click here or group registrations here.
We started our mid-March flat rolled steel market trends survey earlier this week and we will continue collecting responses through Thursday morning. Our Premium level members can expect to see our analysis in a Power Point format on the website on Friday afternoon. If you would like to be added to our survey invitee list please contact me at: John@SteelMarketUpdate.com or you are welcome to give me a call at 800-432-3475.
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?