Final Thoughts
Final Thoughts
Written by John Packard
December 17, 2018
We are quickly sliding toward the Christmas Holiday and the New Year. I guess this means I will need to do some shopping (and shipping) over the next 24 hours or lose my good standing as a father…
Over the next couple of publications, we will write about this year through the rear-view mirror. 2018 will be one of the years long remembered in the steel history books. Right up there with 1973-74 and 2004 or was it 2006? This has been a hum-dinger of a year.
We will also report on our last flat rolled and plate steel market trends questionnaire, which we are working on right now. Are the service centers closer to capitulation? We will let you know either on Thursday or Sunday evening.
We have not been publishing our Service Center Inventories Report to our readers. Right now, that report goes to data providers. We have expanded the detail we are collecting as we work toward providing the market a new product. I will tell you that the number of months of supply of flat rolled came in at 2.5 months, down slightly from the 2.6 months reported to data providers for the end of October. If you are a steel distributor of flat rolled or plate products and you would like to work with Steel Market Update on a confidential basis, please contact me: John@SteelMarketUpdate.com
Our next Steel 101: Introduction to Steel Making & Market Fundamentals workshop on Jan. 29-30, 2019, is now three-quarters sold out (we have about 8-10 seats available). The workshop will be held in Starkville, Miss., and we will tour the Steel Dynamics (SDI) Columbus flat rolled mill and paint line. The Columbus mill produces hot rolled, HRPO, cold rolled, galvanized, galvanneal, Galvalume and it has a paint line. Combined with our quality instructors, 100+ page workbook and the three months membership to our Executive and Premium level newsletters for each attendee, the class has a lot to offer those new to the industry, as well as those seeking a refresher course or just wanting to learn more. You can learn more about the workshop and how to register on our website: www.SteelMarketUpdate.com/events/steel101
As I mentioned above, we are heading toward Christmas and New Year’s and toward a break for me (maybe) and our employees. Our last publication for 2018 will be on Sunday, Dec. 23. We will not publish again, unless there is something that must be covered, until the first week of January. If you need help during the holidays, send us an email at info@SteelMarketUpdate.com and we will get back with you ASAP.
I am here for the balance of the week and…
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
We just wrapped another Steel 101 Workshop, where you take what you learned in the classroom into the steel mill.
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.