Final Thoughts
Final Thoughts
Written by John Packard
December 3, 2018
I took our coated numbers down pretty hard this week. I had been collecting lower numbers over the past few weeks. However, they would pop up sporadically. Come and go for no reason other than a mill decided that the order was too good to pass up, that it fit a hole or that at the kind of margins the mills are making it was just too hard to walk away.
I discussed this with the head of commercial for one domestic mill and he was candid when I asked about finding $40.00/cwt base prices in the marketplace. “Coated has eroded a bit more, but Galvalume is above that,” he said. “Look, the special deal pricing/import fighter has been under $40 for eight weeks already…. So, it’s not surprising if some of that seeps into ‘regular’ business at the base price. Having said that, it seems we are not seeing the same level of price cutting that was going on 15 or 30 days ago. Perhaps the day-in day-out small tonnage price is eroding, but the big ton price is staying fairly stable.”
One service center executive told me there are special prices out there “if you have a good story to tell.”
I guess everyone needs to figure out what story is going to work with what supplier…?
Something to think about and watch closely – if foreign imports continue to drop and service centers have been taking their inventories down due to slipping spot pricing (and the desire to buy at the lower end of the range), at what point does steel become in short supply?
Just heard that scrap settled sideways in Detroit. No word yet on prices in other regions.
Our service center inventories for October were at 2.6 months of supply based on our proprietary analysis of the data we are collecting from our participating distributors. We are also collecting data about how much material is on order, and we are forecasting for those data providers what direction we think service center inventories are headed in the coming months. Right now, that data is only being shared with our data providers. If you would like to become a confidential and protected data provider, please contact DeWayne.Tuthill@crugroup.com for details.
You can also contact me. However, I am in Atlanta and won’t return to my office until Thursday morning.
For our distributor data providers, we have started collection of November data. If you have not received your invitation to participate, please reach out to DeWayne Tuthill at the email provided above.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO
John Packard
Read more from John PackardLatest in Final Thoughts
Final Thoughts
SMU's hot-rolled (HR) coil price slipped this week to $685 per short ton (st) on average. We also adjusted our sheet momentum indicators to lower for the first time since July.
Final Thoughts
When a mapmaker constructs a map, it’s always to the contours of the land. Or sea. That is, the mapmaker doesn’t say, “Look, these rocks really don’t belong here, so I’m not going to include them in the harbor map.” Uncharted rocks, sink ships (along with loose lips).
Final Thoughts
We had an October surprise here at SMU on Wednesday. I was working from the CRU office in Pittsburgh, and the internet connection briefly went out. As luck would have it, that happened smack in the middle of a live Community Chat webinar. Fortunately, my colleague David Schollaert stepped in, Zekelman Industries CEO Barry Zekelman rolled with the punches – and the show went on. Could there be any more October surprises in store for us and for the steel market?
Final Thoughts
We just wrapped up another Steel 101 workshop, easily the most hands-on industry workshop on steelmaking and market fundamentals, in this humble opinion. Last week on Tuesday and Wednesday, SMU’s Steel 101 was held in Starkville, Miss.
Final Thoughts
Everybody has an opinion about politics these days. More importantly for our readers, though, every business has a bottom line. A popular question in our most recent steel buyers survey asked how uncertainty around the upcoming US presidential election could affect that line.