Final Thoughts

January 7, 2019

I mentioned this in my pricing article earlier in this newsletter, but I think it bears repeating. When I was with Winner Steel (now called NLMK Sharon Coatings) we brought up two new coating lines. As each line came onstream it was imperative to get orders, so the line would run. One way to get orders was to price the product “competitively” (below the competition, and in some cases well below the competition). Over time, as the quality and service became known, the mill was able to increase pricing (or reduce the spread between themselves and the competition).

John Packard Summit 18 The electric arc furnace (EAF) at JSW Ohio (former Wheeling Pittsburgh furnace), after sitting idle for the past 10 years, is back online. We understand the mill is transitioning into products other than CS/B (C1006) and working through the various grades. Right now, it appears the mill is running a mix of foreign slabs and new production coming off their EAF. The furnace is still newly operational, so we anticipate a learning curve and ramping-up phase. Part of the ramp-up phase is taking orders in those areas where they are available.

I anticipate going to the Mingo Junction facility in the very near future to inspect the facility and to report on what the steel looks like and the direction the mill is headed. Stay tuned.

It is important when looking at steel prices – and especially when trying to determine a fair market average – that we consider all producing mills. Therefore, we anticipate prices will move lower, faster than they may actually be moving within the entire industry. I will attempt to remind everyone that just because there may be a low number at the bottom of our range, it is not necessarily available from more than one or two producers. We can’t ignore it, but we also need to be aware of the wider market at hand and not get involved in “pushing” prices lower.

For those attending the Port of Tampa Steel Conference on Feb. 12-13, I have been asked to serve as master of ceremonies, and I look forward to an interesting program. They have told me they have an invitation out to a well-known national politician who has ISTR roots. If you are in Florida in mid-February (or you want to be), you may want to consider heading to Tampa.

We will produce our Service Center Inventories “Flash” report for data providers tomorrow and expect to have the full report completed sometime next week. If you would like to become a data provider, and would like to know more about what we are providing to the industry, please contact me at John@SteelMarketUpdate.com. All data providers are confidential as is the data shared with SMU.

We also have our flat rolled and plate steel market trends analysis happening this week. We will report on portions of the analysis in Thursday evening’s issue of Steel Market Update.

Our Steel 101 workshop slated for Jan. 29-30 in Starkville, Miss., has only a few seats left. If you would like to learn more, or wish to register, please go to www.SteelMarketUpdate.com/events/steel101

As always, your business is truly appreciated by all of us here at Steel Market Update.

John Packard, President & CEO