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    Analysis

    October 18, 2017

    Final Thoughts

    Written by John Packard

    SMU published an article in Tuesday evening’s issue about the comments made by General John Adams on national security and the need for steel. The title of the article was “General Goes Nuclear in Support of Section 232.” We received a number of comments from that article wanting to know if we had fact-checked what the general had to say and another disputing some of the assertions he made. The general is a staunch supporter of the Section 232 investigation and he was lobbying to get the president to make a decision (preferably in favor). With the election of Donald Trump and the selection of his cabinet and other officials, such as Trade Representative Lighthizer, there have been a lot of moving parts concerning trade. Just today, Whirlpool asked the International Trade Commission to include 50 percent duties in addition to quotas on ALL foreign-produced washers in its final safeguard recommendation, after the ITC voted unanimously in a Section 201 case that imports of large residential washers hurt the domestic industry. I could rename our newsletter “Trade Today” with all of the news coming from NAFTA negotiations, South Korea negotiations, antidumping and countervailing duty reviews, circumvention cases and Section 337. We feel that much of this is important to our readers, but we do not want to place ourselves in the position of specifically taking sides. Our goal has been to try to provide as much information as possible, link to other sources of good information, and then let you, the reader, make your own decisions. (One source I highly recommend for up-to-the-minute details is World Trade Online.)

    I was listening to the Steel Dynamics earnings conference call this morning. Actually, I had the conference call going in the background as I tried to do three or four other things at the same time. I think it’s called multi-tasking. The thing about multi-tasking is there are times you don’t get to really concentrate on just one thing and follow it through to completion. Anyway, I could hear Mark Millett in the background answering questions about SDI’s latest quarter. Then I heard a familiar voice, Chuck Bradford, and he asked a question of Mr. Millett about the export of Chinese ferrous scrap and if SDI had any feeling for the quality of the material. There are many people in the industry who believe that Chinese scrap and exports of Chinese scrap could well be a major influence on future scrap prices around the world. Mr. Millett told Chuck that he didn’t have an answer to his question since SDI has never bought any Chinese scrap.

    John Packard

    Read more from John Packard

    Latest in Analysis

    November scrap prices rise as market nears settle

    November scrap procurement has commenced in the US with buyers divided on the price increases from the previous month. Several mills reportedly sought a rise of $20 per gross ton (gt) while others saw $30/gt as the number. The $30/gt price tag mainly applies to the obsolete grades, like shredded, P&S and #1 HMS, with prime grades pulling up the rear at $20. SMU spoke to a Chicago-based source who said that market was up $30/gt and 20/gt on shredded and busheling, respectively. He also mentioned the integrated mills in this district are after heavier grades like P&S and railroad grades, like wheels. These grades have been in short supply since last summer. Our source believes they commanded prices up $30/gt while busheling was at plus $20.

    SMU scrap market survey results now available

    SMU’s November ferrous scrap market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the Pricing and Analysis tab and look under the “survey results” section for Ferrous Scrap Survey results. Past scrap survey results are also available under that selection. If you need help accessing the survey results or if your company would like to have your voice heard in our future surveys, contact smu@crugroup.com.

    Scrap export market activity perks up

    There has been an upsurge in Turkish deep-sea scrap buying over the last week for December shipment. Prices paid increased but not as much as the trade expected.cDuring the last week, Turkey-based steelmakers bought at least seven cargoes, largely from the UK and Northern European suppliers, while virtually shunning higher priced US scrap. The initial wave of sales of HMS 80/20 ranged from $395-$398.50 per metric ton (mt) on a CFR basis. This equated to an average increase of less than $5/mt. The was one cargo bought later at $401/mt from this region.

    Market chatter: Supply, not price, dominates steel buyers’ concerns

    On Monday and Tuesday of this week, SMU polled steel buyers on an array of topics, ranging from market prices, demand, and inventories to tariffs, imports, and evolving market events. We are sharing a selection of the comments we received below, in each buyer’s own words. Before diving in, we reviewed all the responses collected and compiled these key takeaways: Respondents overwhelmingly anticipate further increases. Buyers cite limited supply, mill delays, low inventories, and steady-to-strong demand. Most say demand is generally stable to improving, with some purchasing driven by fears of higher prices or unavailable material rather than stronger underlying consumption. Most respondents report faster inventory turnover, while shortages are constraining sales and, in some cases, prompting customer allocations. Buyers increasingly see imports as a way to secure scarce material, though domestic-origin requirements, delivery timing, and pricing risks remain obstacles.