Final Thoughts
Final Thoughts
Written by John Packard
May 5, 2017
This week I will be working with as many trading companies as I can find to talk about what is going on with foreign steel orders and their reaction to the uncertainty being painted with the Section 232 investigation. I have heard of orders being cancelled. I have heard of countries no longer being in the market. I have heard of trading companies contemplating adding an “out” should the government make a move that impacts their orders.
A reminder that we still have seats available for our June 22-23, 2017 Steel 101: Introduction to Steel Making & Market Fundamentals workshop in Ontario, California. You can find details about the workshop on our website or you are welcome to contact me directly and I can discuss what we do and who is best suited to attend one of our Steel 101 workshops. I can be reached at 800-432-3475 or John@SteelMarketUpdate.com
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John Packard, Publisher
John Packard
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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.