Final Thoughts

January 15, 2018

The January import licenses are catching what one domestic mill callls, “Taiwanese January onslaught on Galvalume” as it trends toward 100,000+ net tons for the month (from less than 40,000 tons in December). This is what the mill had to say about pricing in general: “We keep moving our HR and CR up. Coated is a bit more challenging due to timing. General line service center spot is moving up, but in building products we face the Taiwanese January onslaught on Galvalume and old man winter. Not sure which is worse, but they are both hitting hard. Holding on coated, but have a good feeling about pentup demand going forward. Our customer forecasts are strong on our program buyers [contracts].”

We learned earlier today that HARDI wholesalers are seeing good business trends. There were a number of wholesalers who reported strong sales in December, and January is on pace to be yet another good month. Their biggest complaint is one that I hear from just about everyone that competes with service centers – the lack of margin due to some of the distributors selling off of cost versus taking into consideration replacement costs (and where prices may be headed in the future). I spoke with a plate steel mill on Monday and heard the same complaint pointed at plate service centers who sell below replacement costs.

I got a note from a company in the Southwest who expects California Steel to open their March order book soon, and when they do they will announce yet another price increase. If CSI moves higher, you can expect USS/POSCO to do the same. The East Coast mills will either wait for the next round of scrap negotiations or, if lead times move out, they could come out with new prices soon.

Some buyers are not happy with the price increase announcements and are trying to get President Trump’s attention as they believe there is no need for any Section 232 punitive action by the president.

During the HARDI call, we discussed the eventual Section 232 decision. One of the service centers on the call is very active in lobbying on behalf of the steel industry. They believe President Trump will announce a combination of quotas and duties. We will see.

We have begun taking registrations for the 8th SMU Steel Summit Conference. The dates of the conference are Aug. 27-29, 2018, once again in Atlanta. You can register online, link to the hotels that are part of our room block and see what companies attended last year. We have a few of the confirmed speakers on the website, but we are holding some back and will put them out in the coming weeks. We continue to work very hard to produce the absolute best conference possible. You are welcome to contact me with any questions you might have. I am also looking for quality speakers on topics that are timely and of interest to flat rolled and plate buyers and sellers. I can be reached at John@SteelMarketUpdate.com or by phone at 800-432-3475.

I will be in my office for the balance of this week. Next week I will be traveling to Mobile for our sold out Steel 101 workshop.

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

John Packard, Publisher