Final Thoughts
Final Thoughts
Written by John Packard
October 17, 2018
I had an interesting conversation with James (Jim) Banker, Jr., who is the Executive Vice President of NLMK USA late this afternoon. We discussed a couple of topics. One I described in an earlier article about their Allegheny Technologies Inc. slab tolling arrangement announced this morning. The second topic was about why NLMK USA has not followed Nucor and most of the other domestic steel mills in their drive to increase flat rolled prices by $40 per ton.
“We are in a different market,” is what Banker told me. “I’m going to support my customers and not allow the tonnage to go to AHMSA, Tata or some other foreign mill.”
He put the current state of the steel business in real terms for me. “When you announce a price increase, you have to be willing to not take any orders for two weeks. I don’t have a two-week cushion where I cannot take orders. Our lead times on hot rolled are two to three weeks.”
He went on to discuss that there are plenty of competitive pressures. Raising prices does not support their customers. “I thought we were putting a nice bottom in. The timing [of the increase announcements] was two to three weeks early.”
He told us that NLMK is taking orders…
I checked earlier this evening and AK Steel has not followed with a price announcement either. I have not had time to check with AK to see if there was any specific reason why they have chosen not to follow. I will try to find out.
I am in Newport, Ky., across the river from downtown Cincinnati as I am speaking to the Association of Women in the Metal Industries (AWMI) dinner this evening. I should be back in my office on Friday afternoon. Next week, I will be speaking in Houston.
We are working with our 2018 SMU Steel Summit sponsors who will have first shot at sponsoring our 2019 conference, which we expect will be the largest event we have ever hosted, and the premier steel conference in North America. We had 912 attendees this year and we expect that number to reach 1,000 in 2019. If you would like information about sponsoring, please contact Jill Waldman at: Jill@SteelMarketUpdate.com
Thank you to the AWMI for inviting me to speak this evening. I enjoyed the group and no one fell asleep during my talk (which is always a sign of success). If your group would like to see if I am available to speak, please contact me at John@SteelMarketUpdate.com
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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