• Skip to main content

    Analysis

    January 4, 2019

    Final Thoughts

    Written by John Packard

    When on calls with steel service center and manufacturing executives, one of the questions that always comes up is my view on the economy. I am not an economist and I defer to CRU and to economists like Alan Beaulieu of ITR Economics (Alan speaks at the SMU Steel Summit Conference). I know Dr. Beaulieu’s long-range view is for a strong economy in the 2020s, though he has been forecasting a slowdown later this year.

    John and Kermit Boston 2018The question I pose to the manufacturing and distribution executives is, how much longer can the Section 232 steel tariffs stay in place without affecting the economy? With steel costs higher in the U.S., and threats against specific products, there comes a point when the higher cost can no longer be absorbed by the manufacturing companies (especially now that we are in a new calendar year and new contract pricing).  This morning the New York Times reported on the impact tariffs where having on business, with many die-hard American companies now considering moving production to Canada or Mexico due to the damage tariffs are doing to their businesses.

    John Packard

    Read more from John Packard

    Latest in Analysis

    Market chatter: Supply, not price, dominates steel buyers’ concerns

    On Monday and Tuesday of this week, SMU polled steel buyers on an array of topics, ranging from market prices, demand, and inventories to tariffs, imports, and evolving market events. We are sharing a selection of the comments we received below, in each buyer’s own words. Before diving in, we reviewed all the responses collected and compiled these key takeaways: Respondents overwhelmingly anticipate further increases. Buyers cite limited supply, mill delays, low inventories, and steady-to-strong demand. Most say demand is generally stable to improving, with some purchasing driven by fears of higher prices or unavailable material rather than stronger underlying consumption. Most respondents report faster inventory turnover, while shortages are constraining sales and, in some cases, prompting customer allocations. Buyers increasingly see imports as a way to secure scarce material, though domestic-origin requirements, delivery timing, and pricing risks remain obstacles.

    Sheet prices surge as ’26 market squeeze spills into ’27

    Sheet prices soared this week as market participants increasingly predict that the strong market characterizing 2026 will stretch well into 2027. And with extremely limited spot availability, mills that have spot tons to sell are charging a significant premium, they said. The result: Sheet prices saw their highest week-over-week gains since March 2025, according to SMU's pricing records. That's when President Trump shocked the market by expanding Section 232 tariffs to cover traditional US allies such as Canada, Mexico, and the EU.

    Ferrous scrap prices seen rising in November

    Most SMU scrap sources are predicting a stronger scrap market for November. The increase in prices is generally thought be $20-30 per gross ton (gt) in most districts. However, there are differences of opinion about the upcoming price settlements. SMU spoke with a trading source in the Great Lakes region who told us mills in the Eastern Ohio and Western Pennsylvania regions are short on scrap. At least one buyer is offering to buy scrap at a $30/gt increase from October levels. He said most dealers have elected to wait to see where things settle before making commitments.