Final Thoughts

Final Thoughts

Written by John Packard

I am working on an article regarding foreign steel offers, which have almost dried up completely due to the threats/unknowns associated with the Section 232 investigation. There have been a number of months where foreign steel imports have exceeded 3.5 million tons. We are hearing that these months will soon be behind us – although my gut tells me it might be October before we see any radical change in the numbers. The U.S. Department of Commerce will release new import license data on Tuesday evening. We will be on top of the numbers as we work to better understand both the short- and long-term consequences associated with change and with uncertainty.

I was reading an article about India and its steel industry earlier today. It was amazing in light of what is going on around the world regarding steel overcapacity. The article was about how India was looking to become the second largest steel producing nation within the next few years and by 2020-2025 they expect to have 300 million metric tons (330 million net tons) of capacity. (The Business Today article attributes the forecast to Dr. Venugapalan of Tata Steel). Is the world doomed to learn the errors of the Chinese over and over again? The article I was reading also said that the country has enough iron ore supplies to support that 300 million metric tons for 35 years.

I also read a piece in The Hill written by Daniel Pearson about how foolish the Chinese must feel transferring their wealth with every ton of steel they export to the rest of the world.

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Final thoughts

Last week was a newsy one for the US sheet market. Nucor’s announcement that it would publish a weekly HR spot price was the talk of the town – whether that was in chatter among colleagues, at the Boy Scouts of America Metals Industry dinner, or in SMU’s latest market survey. Some think that it could Nucor's spot HR price could bring stability to notoriously volatile US sheet prices, according to SMU's latest steel market survey. Others think it’s too early to gauge its impact. And still others said they were leery of any attempt by producers to control prices.