Final Thoughts
Final Thoughts
Written by John Packard
July 6, 2018
I will be in my office on Monday and Tuesday of this week before traveling to Maine to speak to the Chain Link Fence Manufacturers Institute on Thursday. I have a very busy schedule over the next couple of months leading up to our 8th SMU Steel Summit Conference on Aug. 27-29. I hope I will see many of our readers at the conference this year. Should be a great networking and forecasting event.
I have noticed the word “disconnect” being used quite often regarding a wide variety of topics concerning the steel and scrap industries. Over the weekend it was used to describe the relationship between scrap and steel pricing. With prime grades of scrap going for the low $400’s and hot rolled coil around $900, there is an obvious disconnect. There is also a disconnect between what is happening with steel prices in the rest of the world and what is happening here.
I thought the letter we received (and published in this evening’s issue of SMU) in response to the letter to the editor we published on Thursday regarding the forecast for prices to drop by $200+ per ton by the end of the year was interesting. It was from someone within the trading portion of the industry.
With the U.S. Chamber of Commerce, farmers from across the United States and especially in the “Red” states and the auto industry coming out against tariffs, we could see them removed before the end of the year. My personal opinion is, after watching the Trump administration so far, their belief is the size of the U.S. market will ultimately make China and other countries come to the table and cut better deals. My guess is we will have to wait (and hold our collective breaths) to see if the administration has played their hand correctly.
I will be reviewing our Price Momentum Indicator this week as it appears there is a disconnect (there’s that word again) between products. Hot rolled and plate may be reacting to market forces that are not as strong for cold rolled and coated steels. If you have any opinions or commentary on the subject, please send it (confidentially) to me at John@SteelMarketUpdate.com or give me a call at 800-432-3475.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO
John Packard
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Final thoughts
SMU has heard from some larger buyers who have stepped back into the market to buy at prices that, if not at a bottom, they assess to be close to one. Is it enough to stretch out lead times and send prices upward again? Or do we continue to scrape along the mid-$600s per short ton (st) as we have been doing for most of the last month?
Final thoughts
Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves had some insightful things to say today about the steel market and about a conference we suspect might be Steel Summit.
Final thoughts
They say a picture is worth a thousand words. Well, when you add in some commentary from respected peers in the steel industry to those pictures, that may shoot you up to five thousand words, at least. In that spirit, we’ve added some snapshots from our market survey this week, along with some comments from market participants.
Final thoughts
I thought we’d have more clarity this week on Section 232, Mexico, and a potential carve-out for steel melted and poured in Brazil. As of right now, the only official comment I have is from the Office of the United States Trade Representative (USTR).
Final thoughts
There are just 40 days left until the 2024 SMU Steel Summit gets underway on Aug. 26 at the Georgia International Convention Center (GICC) in Atlanta. And I’m pleased to announce that it's official now: More than 1,000 people have registered to at attend! Another big development: The desktop version of the networking app for the event has officially launched!