Final Thoughts
Final Thoughts
Written by John Packard
August 21, 2017
I am stuck between a rock and a hard place. We are trying to accommodate everyone who wants to attend our 2017 SMU Steel Summit Conference even though we are technically sold out. We did manage to loosen up a few seats and those were gobbled up the moment we let people know they were available. Now we are trying to accommodate those who waited until the last minute or who began the registration process but never finished and were never confirmed. Please be aware that every single seat has been sold and will be in use during the conference…
I got a note from one of our readers who advised that the Circumvention case has a looming deadline of Aug. 31.
Trade attorney Lewis Leibowitz advised that the Section 337 case is in discovery (The ITC is reviewing the circumvention portion of that case – we have an article about that in tonight’s issue). AD/CVD we should know something by September. Section 232 – its all politics right now and being held up by the president.
I am on the road tomorrow. I will return phone calls as I am able. I should be in Atlanta and back to my daily routine by Thursday (whatever that means in light of our conference being just a few days away).
A special thank you to my staff who are doing a great job holding all the pieces together heading into the conference: Ray Culley, Diana Packard, Brett Linton, Alison Lalonde, Tim Triplett, Sandy Williams, Peter Wright, John Eckstein, Mario Briccetti and Steve Painter.
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?