Final Thoughts

Final Thoughts

Written by John Packard


A note that SMU adjusted our Price Momentum Indicator to Lower from Neutral on Friday. I have explained 10 of the reasons why (and there are more) in the first article in tonight’s newsletter. If you would like to make comments, feel free to reach out to me at John@SteelMarketUpdate.com.

I will be working on foreign steel offers early this week as there have been a number of comments from both buyers and sellers of steel about the high prices associated with foreign right now. I will be working on trying to explain what that means and what it might mean for domestic steel prices in the months ahead. The market has been waiting for a correction of foreign steel imports, but it has not happened despite antidumping and countervailing duties. It has not happened due to the threat of Section 232 (in fact, I believe the Section 232 investigation has worked against the domestic steel mills). Logic says if foreign prices are higher than domestic, that should create an environment that favors domestic steel mills. The question is, exactly when?

Because one of the other things I have been hearing is from the OEMs who have gone out and protected themselves, buying extra inventory and/or taking advantage of their domestic contracts. Will the domestic mills be able to raise prices should there be less first-quarter demand than normal?

If you have opinions on these subjects, please contact me at John@SteelMarketUpdate.com or 800-432-3475.

As always, your business is truly appreciated by all of us here at Steel Market Update.

John Packard, Publisher

Latest in Final Thoughts

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.