Steel Products

SMU Price Momentum Indicator Adjusted to Higher
Written by John Packard
December 5, 2017
Steel Market Update adjusted our Price Momentum Indicator to Higher from Neutral earlier today. It is our opinion that flat rolled steel prices will rise over the next 30 to 60 days. We last adjusted Momentum on Oct. 18, 2017, when we moved from “Lower” to “Neutral.”
We are hearing from buyers and sellers of flat rolled steel that they expect to see higher prices in the coming weeks. They are expecting good demand in the first quarter, which is where the domestic mill lead times are right now.
A domestic mill source advised SMU this morning that they were waiting for scrap to settle before the next price move is made. “Lead times are in mid to late January. Waiting for scrap to settle formally before making another push. Global is heating up again with cost-push coming back, and inventories in the U.S. are drawing down in our core markets. I am quite bullish about seeing major price increases in Q1.”
There will be fewer tons of foreign steel entering the United States over the next few months. We saw the reduction during the month of November as license data is suggesting imports of about 2.6 million tons. We expect imports will remain low due to higher international prices, duties associated with antidumping/countervailing duties and now the positive ruling on circumvention by Vietnam and China.
There is another trade issue that we cannot ignore. The Section 232 investigation is still out there and the deadline of mid-January is fast approaching. SMU believes there will be some cost associated with importing foreign steel that doesn’t exist now. That cost could come in the form of a tariff or some sort of quota (or both).
SMU is of the opinion that if there are any “Gray Swan” events, they would most likely be favorable to higher steel prices.

John Packard
Read more from John PackardLatest in Steel Products

Market says cutting interest rates will spur stalled domestic plate demand
Market sources say demand for domestic plate refuses to budge despite stagnating prices.

U.S. Steel to halt slab conversion at Granite City Works
U.S. Steel said it plans to reduce slab consumption at its Granite City Works near St. Louis, a company spokesperson said on Monday. The Pittsburgh-based steelmaker will shift the production and processing of steel slabs to its Mon Valley Works near Pittsburgh and its Gary Works near Chicago. Citing a United Steelworkers (USW) union memo, […]

SMU Week in Review: September 1-5
Here are highlights of what’s happened this past week and a few upcoming things to keep an eye on.

HR Futures: Market finds footing on supply-side mechanics
As Labor Day marks the transition into fall, the steel market enters September with a similar sense of change. Supply-side fundamentals are beginning to show signs of restraint: imports are limited, outages loom, and production is capped, setting the stage for a market that feels steady on the surface but still unsettled underneath.

Beige Book: US markets remain cautious amidst volatile pricing environment
Sluggish economic activity across the US was largely attributed to uncertainty caused by tariff policies and growing cost pressures, according to the US Federal Reserve’s (The Fed) latest Beige Book report. The Fed’s latest economic report, posted on Sept. 3, consists of economic findings from the six weeks preceding Aug. 25 throughout 12 districts. Economic […]