Final Thoughts
Final Thoughts
Written by John Packard
August 2, 2017
It has been another busy week here at Steel Market Update.
We are hearing from steel buyers that Nucor is considering raising flat rolled prices by $25 per ton within the next few working days. The increase would follow an increase in ferrous scrap prices for August delivery.
We have also heard that at least one Midwest mill is considering lowering galvanized spot base prices. At the same time, other buyers who do business with that mill are reporting no weakness.
I saw that California Steel Industries opened their September order book. I did not see a price announcement with their notification that the book was opening.
We just concluded our early August flat rolled steel market trends analysis and a piece of our findings are in tonight’s newsletter. We will make available a PowerPoint presentation on much of the results from this week’s analysis for our Premium level members tomorrow.
On Tuesday, I mentioned in my Final Thoughts that we had 10 slots left for the Fort Wayne, Ind., Steel 101 workshop. We had a surge of registrations yesterday, and we have three companies asking for spots that may/may not be there. We are building a wait list for the Oct. 4-5 workshop, and we are working on announcing the workshop that will follow Fort Wayne. I hope to have that information available for you in the next week or two.
A special thank you to the companies and individuals who wished Steel Market Update a happy 9th birthday.
Conference, conference, conference… For those of you who are already registered, we sent out a special newsletter this afternoon (Thursday), which contained information about the SMU Events App, registrations, sponsors and exhibitors, and an expanded view of our agenda. Please take the time to download our App (or if you have it from 2015 or 2016, switch to the 2017 program). The App is where you will find our list of attendees, speakers and speaker bio’s, sponsors and exhibitors, our agenda, social media links and access to our polling/surveys. We have asked a few very simple questions in our App already and will consolidate the answers and present them at the beginning of our program. On Tuesday, Aug. 29, a portion of the program will be a live interactive discussion with our audience as we gauge how they feel about the existing market conditions.
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?