Final Thoughts
Final Thoughts
Written by John Packard
April 3, 2017
Congratulations to AK Steel which will cut the ribbon on their new Research and Innovation facility at the end of this week. It is truly enjoyable to see a domestic mill investing in the future of the industry. The new 135,000 square foot, $36 million dollar facility is located in the Renaissance District of Middletown, Ohio which is 14 miles from the company’s headquarters in West Chester, Ohio.
Steel Market Update is looking for “feel good” stories about the industry. If you or your company has something interesting, enlightening or challenging to say please send it to: John@SteelMarketUpdate.com.
Next week we will conduct of Steel 101 workshop in Toledo, Ohio. Over the past couple of years the reputation of our workshop has grown to the point where we have a waiting list for most workshops just a few weeks after we put registration online. Our next workshop is going to be on the West Coast where we have not been for awhile and we recommend registering as soon as possible just to be safe. You can do so on our website: www.SteelMarketUpdate.com or you can contact our offices: 772-932-7538 or 706-216-2140.
I spoke to the Steel Framing Industry Association and heard back from the associations director how pleased they were with the quality of the information I shared with their group. If your company or association has an interest in having me speak to your group I can be reached at: John@SteelMarketUpdate.com or at 800-432-3475. I try to limit the number of times that I speak on a yearly basis due to all of the other commitments I have – but, I do like getting out on occasion and meeting new groups and new people.
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.