Final Thoughts
Final Thoughts
Written by John Packard
February 18, 2019
I am chomping on the bit as today we managed to book a nationally known and widely recognized speaker who will (I hope) hold everyone in their seats until the end of our SMU Steel Summit Conference. When booking your travel to Atlanta for our conference, you will want to arrive as early Monday morning (Aug. 26) as possible as we expect a futures/hedging seminar to be held prior to our conference, which will officially kick off at 1 p.m. ET that day. The first program will feature Chris Houlden, Josh Spoores and me discussing some of the proprietary products we offer, along with the CRU steel price forecast for the balance of 2019 and all of 2020.
We will also have a program addressing transportation issues (specifically trucking and the railroad) and a very strong distribution/processing/coil coating panel with the CEOs of Ryerson, Russel Metals and the President/COO of Precoat Metals. Then we go right into the first networking gala hosted by Heidtman Steel.
Registration is way ahead of last year’s pace. We anticipate close to 1,000 executives at this year’s conference and, as I have said many times already, we will have one of the strongest lineups of speakers we have ever had. You can register online and find more information on our website: www.SteelMarketUpdate.com/events/steel-summit. My goal is to have the first draft of our conference schedule on our website by the end of this week. Stay tuned for more details.
I have heard from Ternium in Mexico that they would like to work with Steel Market Update and have us conduct one of our Steel 101 workshops in Monterrey, Mexico. I have been invited to visit them ASAP to review their training facility and to meet with their executives. I will have more details coming regarding our first foray into Mexico. Stay tuned.
We have been getting many new members for both the Executive and Premium levels of our newsletter and website. I want to welcome you to SMU, and I encourage you to interact with us whenever you have a question, comment or suggestion. We will do our best to answer your query or to take your suggestion in order to make our product even better.
I also encourage our existing members to speak with Paige Mayhair regarding your membership, and how we can improve how you interact with Steel Market Update. One of my original goals for SMU was to encourage companies to provide the product to as many of their employees as possible. CRU has embraced the concept and has come up with a couple of unique levels (regional and global) that will allow companies to put a wide number of employees onto their subscription without having to pay huge fees. Contact Paige at 724-720-1012 or Paige@SteelMarketUpdate.com
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?