Final Thoughts
Final Thoughts
Written by John Packard
January 5, 2018
As of late Friday, Steel Market Update ferrous scrap sources reported that scrap negotiations were ongoing and had not yet settled for the month of January. We heard late in the week of one Detroit-area mill paying up $20 per gross ton on prime grades and up $30 per gross ton on cut grades. We expect the market to break open early this week, and we should have more on where prices settled in Tuesday evening’s issue of Steel Market Update.
This week will be an interesting one to see how much the steel mills truly want to collect the $40 flat rolled and $50 plate (Nucor, others expected to follow) price increases. Early indications are for $680-$700 hot rolled offers, which would be about $40 per ton higher than where our index was prior to the announcements.
We still have a few sponsor spots left for the 2018 SMU Steel Summit Conference. We have a number of companies procrastinating. I always try to get the sponsors cemented in as early as possible since this impacts what we will do regarding our ticket prices. The sponsors also want to be in as early as possible so that when we start our marketing efforts, we try to mention our sponsors and provide as much exposure as possible. Right now, we have the following sponsors: Pacesetter, Bank of America, Flack Global Metals, Heidtman Steel, Nucor, Magic Coil Products, Mill Steel, MidWest Materials, Red Bud Industries, All Metals Service and Warehousing and Alliance Steel.
We have plenty of exhibition space, which for 2018 will be configured differently as we expand our footprint in the Georgia International Convention Center. We believe the new location for breaks and the exhibition space will provide even more exposure for our exhibitors.
If you have any questions about SMU Steel Summit sponsor or exhibitor spots, please contact Jill Waldman at Jill@SteelMarketUpdate.com or myself at John@SteelMarketUpdate.com.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John Packard
Read more from John PackardLatest in Final Thoughts
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?