Final Thoughts

Final Thoughts

Written by John Packard

April 9, 2018

I’ve been asked my opinion as to which way steel prices will head from here. There seems to be a bit of a lull at the moment that one steel buyer attributed to the mills trying to stave off imports and not appear to be too greedy. Steel buyers are telling me that they will continue to buy foreign steel. To many buyers, it is a matter of price, to others it is principal. I continue to hold our Price Momentum Indicator at Higher as all the balls are in the mills’ court, or should I say the government’s court. We should get a better feel as to how President Trump and his DOC and USTR team are going to handle Canada, Mexico, Europe and other nations by the end of this month. We will also have a better feel as to how much “new” tonnage is being placed with foreign trading companies. At the moment, we are being told it is relatively minor tons.

I am doing some investigation as to what offers are out there on foreign hot rolled (hearing $43.00/cwt-$44.00/cwt USA port, which is not an attractive number if you think prices will drop later this quarter or early into third quarter), cold rolled (hearing Vietnam in the $47-$48 base price range) and coated steels (hearing Galvalume in the low $50’s including the 25 percent tariff).

I should have our service center number of months of supply index done tomorrow (Wednesday). Our “Flash” report had inventories dropping from 2.8 to 2.6 months at the end of March. Remember, this index will be available for Premium customers only once it is one year old (as of the end of June 2018).

I also want to remind everyone that we are taking registrations for our next Steel 101: Introduction to Steel Making & Market Fundamentals workshop, which will be held in Memphis, Tenn., on June 5 & 6, 2018. Included will be the first time we will tour two steel mills during one workshop. We will tour the Nucor Hickman flat rolled mill and then tour the Nucor-Yamato beam and Castrip mills. I personally am looking forward to this workshop as I believe it will be special. The class is about one-third full at this time. Go to www.SteelMarketUpdate.com/events/steel101 for details, costs, hotel and registration.

I am in the office all this week. I can be reached at John@SteelMarketUpdate.com if you have any questions or if you would like to offer suggestions on how SMU can improve.

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

John Packard, Publisher

John Packard

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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.