Final Thoughts
Final Thoughts
Written by John Packard
May 1, 2017
The domestic steel mills did not cancel scrap orders for April delivery that had not yet arrived. This is a sign that the steel mills believe prices will be sideways to slightly higher for May delivery than what they negotiated for April. All is quiet as the steel mills and their scrap suppliers jockey for position. Last night we were advised to watch prime grades of scrap in Canada and the Ohio/Detroit markets due to the outage at the EAF at ArcelorMittal Dofasco and the planned maintenance on the “B2” furnace at USS Great Lakes. When I discussed this with a couple of my scrap sources in the area they told me these were “non-issues” as the EAF will be back in service within the next couple of days and the Delta mill was a bigger factor for scrap prices in the Detroit market. We do expect to have some information on May ferrous scrap prices on Thursday and we will advise at that time.
The U.S. Department of Commerce initiated a dumping suit against steel tool boxes from China and Vietnam. Companies who manufacturer products overseas need to be aware that it only takes one company (or the DOC itself to “self-initiate”) to file a dumping suit to create all kinds of problems for your company. In the case of the tool boxes from China it was Waterloo Industries in Missouri.
I have confirmed with trade attorney Lewis Leibowitz and Daniel Pearson, Fellow at Cato Institute and former ITC Chairman, that they will be conducting a discussion about the various ways trade cases can be initiated and how each one works. Specifically, I have asked them to help our SMU Steel Summit attendees understand Section 232, Section 337, Section 201, Antidumping (AD) and Countervailing Duty (CVD), Circumvention and the concept of “self-initiation” by the U.S. government. This education session will be held as one of the two Pre-Summit Conference programs we will have on Monday, August 28th at the Atlanta Airport Marriott Gateway Hotel (our conference host hotel) located next to the Georgia International Convention Center (www.gicc.com). This program will begin at 2 PM ET at the Marriott Hotel. Registration (picking up your credentials) will begin at 1 PM in the lobby of the Marriott Hotel. Leibowitz and Pearson will also be part of a “free and fair trade” panel at 3 PM on Tuesday at the Convention Center along with Philip Bell, President of the Steel Manufacturers Association and one other speaker representing the manufacturing community.
As I mentioned the other day our room block at the Marriott Gateway Hotel is filling fast. We had 80 rooms left as of last week. We have plenty of rooms at the SpringHill Suites hotel across the street. If you are “budget minded” it is best to book now before all of the special rate rooms are taken…
We still have plenty of seats left for our next Steel 101: Introduction to Steel Making & Market Fundamentals workshop in Ontario, California. Details are on our website or you can contact me in my office: 800-432-3475 or John@SteelMarketUpdate.com
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
Another day, another massive gap between the news and market sentiment. On the news side, we’ve got war in the Middle East. The devastation facing western North Carolina coming into tragic focus. And the outcome of the presidential election remains a coin toss, according to current polling.
Final thoughts
There are markets where the headlines and the prices are both crazy. This does not appear to be one of them, at least not yet.
Final thoughts
Washington loomed large in our surveys this week. Two things actually: the upcoming presidential election and the trade case against imported coated products from 10 nations.
Final thoughts
Thanks to everyone who attended our Steel Hedging 101 workshop in Chicago on Wednesday. I learned a lot from StoneX Group’s Spencer Johnson, who instructs the course, and from your good questions. One thing that Spencer said sticks with me as I write this column. Namely, that momentum drives steel prices more than other commodity markets. If you watch steel futures, you’ll see up days and down days. But it’s rare to see the momentum shifting back and forth within any given day.
Final thoughts
SMU's prices ranges for flat-rolled steel were mostly sideways on Tuesday even as futures market shot higher. I got some questions as to why hot-rolled (HR) coil futures shot higher. As best as I can tell, it might have been in response to news that China plans to roll out stimulus measures. We have details on those measures here thanks to our colleagues at CRU. The chart below gives you some idea of just how sharply upward the move in HR futures was earlier on Tuesday: