Final Thoughts
Final Thoughts
Written by John Packard
August 29, 2018
Nucor and USS/POSCO announced new coating extras today, and SMU learned U.S. Steel will provide their new extras in about a week and Steel Dynamics will announce their numbers within the next few days. Coating extras have dropped due to lower zinc costs on the LME over the past few months. SMU expects all of the domestic steel mills will have lower coating extras within the next week or two.
The 2018 SMU Steel Summit Conference was an outstanding success. We had 912 attendees, 182 new companies and 446 first-time attendees. I was told by virtually everyone with whom I had contact that the conference was the best one yet. This is especially gratifying to Ray Culley, Jill Waldman and myself as we spent many months vetting and selecting topics and speakers. The program was diverse yet timely. There were many sessions where our attendees made their way into the exhibition areas of the lobby of the GICC and discussed what they had just heard. We also heard from attendees some of these conversations would continue back at their offices.
“It was excellent. I never experienced one better. Believe me, over 48 years I have attended many.”
“Nice conference. [I] was able to connect with many, many faces I had not seen in a long time. Reminded me of the Annual MSCI meeting back in the day.”
“Great conference, sir! Kudos, everyone I spoke with loved it.”
“Great conference again this year, John.”
“Outstanding SMU conference all around. Adding to my don’t miss list and bringing more from my team next year. Great speakers. Great flow. Loved the multiple perspectives. Great app.”
Jonathan Samples of Metal Center News wrote an excellent piece on our conference:
“…My first comprehensive examination of the steel industry came one year ago today, when I attended Steel Market Update’s 2017 Steel Summit. I didn’t know it at the time, but conferences such as Steel Summit would come to play a crucial role in my development and eventual understanding of the steel industry.
And after a year in which I attended many of the major metals conferences in North America, I can say with a fair degree of certainty that Steel Summit is at the top of its game when it comes to comprehensive, engaging and entertaining coverage of the industry.
The eighth annual Steel Summit is being held this week in Atlanta, and once again, SMU’s annual conference has outdone itself. Attendance at this year’s conference increased nearly 40 percent to 912 people, as more and more folks learn about the benefits of this worthwhile event….” To read the full article click here.
We are already working on the 2019 conference, which will be held on Aug. 26-29 in the Georgia International Convention Center (GICC) adjacent to the Atlanta International Airport. Mark your calendars and put us in your budget for 2019.
Note that due to the Labor Day Holiday, we will not publish on Sunday evening. We will resume our regular schedule on Tuesday.
It was a long drive back to my office. Thank you to everyone who helped make our conference the best one ever – Ray Culley, Jill Waldman, Brett Linton, Diana Packard, Alison Lalonde, Mario Briccetti, Tim Triplett, Sandy Williams, Chuck McDaniels, Steve Painter and Jeff Lalonde.
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
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?