I thought some of the comments made to me earlier today by one of the steel mills were quite interesting. “We continue to see good activity, but regional trade is king (and competitive) and long lead time foreign is being shunned. Instead of fighting off Vietnam in coated, we see a battle within NAFTA. Imports still coming in but U.S. mills producing more and exporting less. Keeps the action nearby, which suits customers just fine since they do not want to carry inventories and there is a certain expectation (yet again) that duties on Canada and Mexico could come off in Q1….All leads people to stay close to home.”
The question I am being asked is what happens to spot steel prices should the Section 232 tariffs on Canada and Mexico come off, and will they be replaced by some sort of quota? One of the wild cards floating out there as we consider what 2019 will look like. I am keeping our Price Momentum Indicator at Lower as there appear to be more reasons for prices to continue to slip than to reverse course. Not everyone sees it that way, as one Upper Midwest service center told us earlier today, “Prices ‘could’ go up if demand at the mill level rises as anticipated for first quarter.”
A reminder that we will not publish our newsletter again until Sunday evening, Nov. 25. We want to wish everyone in the United States a Happy and Healthy Thanksgiving Holiday on Thursday. Our offices will be closed on Friday of this week. We will be open on Wednesday and first thing Monday morning.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO
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