Steel Products
Hurricane Takes Forefront at Steel Summit
Written by Sandy Williams
August 29, 2017
SMU’s Steel Summit 2017 kicked off its first full day with heartfelt empathy for those colleagues in the Houston region who were unable to make it to the conference in the wake of destruction left by Hurricane Harvey.
The devastating floods along the Gulf Coast and in Houston may have a lasting impact on the economy, said Dr. Chris Kuehl, keynote presenter and managing director of Armada Corporate Intelligence. Up to 10 percent of the Texas population may be displaced as families move from destroyed homes and flooding, he said.
The state budget for disaster relief will be exhausted within a week and billions of dollars will be needed over the next few years to rebuild the area, said Kuehl. Although the administration has declared a disaster emergency in the area, funding for relief comes at a tenuous time in Washington as Congress confronts a possible government shutdown.
Freight transportation is at a virtual standstill in southeast Texas as heavy rains closed seaports in Houston and Corpus Christi. The Port of Corpus Christi sustained moderate damage from the storm. The Coast Guard has issued a “Condition Zulu” for all port channels, effectively closing down the port until further notice. The Port of Houston remained closed on Tuesday due to weather conditions, along with Galveston and Freeport.
FTR Transportation Intelligence anticipates up to 10 percent of U.S. truck capacity will be disrupted during the next two weeks.
“Look for spot prices to jump over the next several weeks with very strong effects in Texas and the South Central region,” according to Noël Perry, partner at FTR. “Spot pricing was already up strong, in double-digit territory. Market participants could easily add 5 percentage points to those numbers.”
Houston is a major interchange point for freight, and high waters will affect intermodal transport. Union Pacific has stopped all freight rail service to the Houston area. BNSF reports Houston (Pearland) Intermodal and Automotive are both open, but road conditions are preventing access to the facilities and only emergency-related travel is advised. Train loading/unloading operations are currently suspended and BNSF is re-routing some traffic. Customers are advised to expect continued delays on shipments.
Average national gasoline prices jumped to $2.37 per gallon at the pump on Tuesday in response to fuel supply disruptions from the hurricane. Refinery shutdowns Friday through Monday in Galveston and Corpus Christi lowered total refining capacity by one-sixth or three million gallons per day.
“It’s still really early to tell what this is going to mean for long-term supply,” said Denton Cinquegrana, chief oil analyst at Oil Price Information Service. “If some of these refineries are flooded, it’s going to take weeks to get the water out of there and then get into damage assessment.”
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Products
Active rig count update through mid-May
Drilling activity ticked up in the US but declined in Canada during the week ended May 17, according to the latest release from Baker Hughes.
Mexico’s TYASA breaks ground on SBQ rolling mill
Mexican steelmaker Talleres y Aceros (TYASA) broke ground this month on the construction of a new special bar quality (SBQ) rolling mill in the state of Veracruz.
Biden hikes tariffs on Chinese goods, including steel and aluminum
The Biden administration announced a series of actions on Tuesday targeting China’s "unfair" trade policies. These actions will, among other things, make imports of steel and aluminum from the Asian nation even more prohibitive.
Nucor holds weekly HRC price steady after last week’s cut
Nucor chose to hold its consumer spot price (CSP) for hot-rolled (HR) coil steady this week after stunning the market last week with a significant price decline. The steelmaker said in a letter to customers on Monday morning that its $760-per-short-ton (st) CSP base price for HR coil is effective immediately. The price is unchanged from the CSP announced on May 6 but down $65/st from $825/st April 29.
US CR tags ease, premium over imports still high
Offshore cold-rolled (CR) coil prices remain much less expensive than domestic product, even as domestic prices have slipped to a six-month low, according to SMU’s latest check of the market.