Final Thoughts
Final Thoughts
Written by John Packard
May 12, 2017
Happy Mother’s Day (at least for one more hour here on the East Coast)…
We are beginning our mid-May flat rolled steel market trends survey at 8 AM ET tomorrow (Monday) morning. If you receive an invitation to participate please take a few minutes to click on the button on your invitation and complete our questionnaire. At the end of this week we will have a Power Point presentation which is available to those who participate in the survey as well as our Premium level customers.
I will be traveling beginning on Wednesday as I head for Atlanta to meet with the Georgia International Convention Center (www.GICC.com), the Marriott Gateway Hotel and the new AV company that will be working with SMU to bring the look and feel of the 2017 conference to a new level. As of this evening we have 105 days remaining before the 7th SMU Steel Summit Conference begins. Tell your steel friends, suppliers and customers to meet us in Atlanta on August 28, 29 & 30th.
I want to take a moment to thank trade attorney Lewis Leibowitz for all of the support he has given Steel Market Update, our readers and those attending our conferences as we try to navigate AD/CVD, Section 337, Circumvention and now the Section 232 investigation. I hope you are finding his help valuable. He will be working with SMU again at this year’s SMU Steel Summit Conference as he teams with former ITC Chairman, Daniel Pearson of the Cato Institute to help our attendees better understand all of the trade suits, deposits, duties, remedies and maybe what’s next. We added a special Pre-Summit program on Monday afternoon. Plan on arriving early and staying until the end. We still have surprises to come.
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?