Final Thoughts
Final Thoughts
Written by John Packard
April 11, 2018
Our 8th SMU Steel Summit Conference registrations are quickly approaching 300 executives. With 136 days still to go, we are confident we will set another record attendance. Over the past two days we have received registrations from the following companies (those with a * next to their name means there is more than one person attending from their company): Overhead Door*, Nucor*, Ryerson*, Wabash National, Honda of America*, Acuity Brands Lighting, Klauer Manufacturing, Mainline Metals*, Berlin Metals*, Leeco Steel* and West Coast Metals*.
You can join those and the hundreds of other companies who will be attending this year’s conference in Atlanta on Aug. 27-29, 2018, by going to www.SteelMarketUpdate.com/events/steel-summit to register. You can also contact our offices at 772-932-7538. If you have questions, you can email them to info@SteelMarketUpdate.com.
Late this afternoon, UPI told their customers that their July order book is now closed.
It’s been a busy week and there is still another day to go…
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
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?