Final Thoughts
Final Thoughts
Written by John Packard
August 6, 2018
As many of you are aware, I receive numerous questions on the steel, steelmaking and commodity markets on an almost daily basis. I endeavor to answer the questions that I am able as quickly as I can. Those questions asked that fall outside of my wheelhouse, I will try to locate someone who can help. Yesterday, I had a question come in about graphite electrodes, which are used in electric arc furnaces. I was unable to answer their question, so we reached out to CRU and found the project director for the CRU graphite electrodes market outlook and introduced them to the SMU member who was asking for information. The CRU Group provides SMU a deeper pool of experts and will make us an even stronger organization in the days, weeks and months to come.
We have plenty of seats available for our new Steel 201 workshop. Please call me if you have any questions: 800-432-3475.
It will be standing room only at this year’s SMU Steel Summit Conference. As of this afternoon, we have registered 842 executives. If you are a procrastinator, we are still taking registrations at www.SteelMarketUpdate.com/Events/Steel-Summit or by contacting our office at 772-932-7538.
A reminder that Steel Market Update readers, as well as those who have attended a past SMU Steel Summit or a training workshop, have a unique opportunity to participate in a webinar about the North American steel market conducted by our parent company, CRU. The webinar entitled, “Mid-Year Update on the North American Steel Market,” will feature presentations from three experienced CRU analysts covering a range of North American economic, trade and flat-rolled steel price forecasts and insights. Any SMU customer can register for the webinar for free, and participants will be able to pose questions privately for speakers throughout the webinar. To register click here.
A couple of mills have made cautionary statements regarding U.S. steel prices being a bit out of whack with the rest of the world. Steel buyers are being cautious and not over-buying. End users are buying only to the minimums on their contracts.
One head of commercial for a steel mill told SMU today, “We are hanging on [to last week’s pricing], but my guess is next week we may have to adjust a tad… Contract buyers going to the min [minimum] levels on volume….”
SMU is holding our Price Momentum at Neutral for the time being. Even so, we caution buyers as there is a small breeze coming through the trees….
A steel mill told us today that the biggest pressure is on hot rolled pricing right now. A trader told me the Mexican HRC numbers into Houston were aggressive ($80-$100 below domestic) and needed to be watched.
The key is lead times, and we are hearing some of the mills have come back in (shorter lead times). We heard one southern mill has early September lead times on HRC.
As lead times shrink, this gives buyers time to sit back and hold off on ordering steel. This in turn pressures the domestic mills to react to slower inquiries by offering special discounts on new orders to fill their order books.
Steel buyers sense the market is in transition.
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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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?
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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).
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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!