Final Thoughts
Final Thoughts
Written by John Packard
February 11, 2019
I am in Tampa, Fla., where I will be the master of ceremonies and the moderator of two panels regarding trade and trade policy at the 30th Port of Tampa Steel Conference. Originally, I was only going to moderate one panel, but weather in the Northeast has fouled up air travel and the original moderator’s flights to Tampa were all cancelled. I guess this is where my “dancing” shoes get pulled out of the bag. For those of you who are not associated with sales, dancing is what salespeople do as they try to figure out the proper thing to say in front of a customer who has dropped a surprise on them.
If your company would like “dance” lessons for your sales and purchasing staff…well, Steel Market Update does conduct custom workshops on a variety of topics, including sales.
The 2019 SMU Steel Summit Conference will be addressing the trade issue in a number of ways this year. We will have a strong panel with stalwarts like Philip Bell of the Steel Manufacturers Association and trade attorney Lewis Leibowitz. Both gentlemen have spoken at past SMU conferences and both are highly regarded for their grasp of the facts and their ability to convey their opinions to our audience. They will be joined by a couple of new faces with differing viewpoints to help round out the discussion on what is a very contentious topic.
Registration is open. We are already seeing strong registrations with companies deciding to bring multiple executives in order to take full advantage of the networking, as well as the strong agenda and speakers we will have at the 2019 conference.
For those of you who are not aware, the dates for this our 9th SMU Steel Summit Conference are Aug. 26-28 and the venue is the Georgia International Convention Center, which is located adjacent to the Atlanta International Airport (ATL). Costs for the conference are reasonable as are hotel rates for those who are proactive and don’t wait until the last minute. I will tell you that we will run out of rooms in our room block as we anticipate close to 1,000 attendees this year. You can find information about the conference on our website: www.SteelMarketUpdate.com/Events/Steel-Summit
There will be much more coming out on the agenda and speakers we have booked for the 2019 conference in the coming days. I hope to have a draft of our schedule on the website within the next week or so. We will leave a couple of gaps as we like to fill them based on what is the “hot” topic at the time, or we will hide a speaker as a “surprise” for our attendees. We believe surprises should be good things…
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO
John Packard
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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.
Final Thoughts
We're about to hit 50% Section 232 steel tariffs. What could happen?