Final Thoughts
Final Thoughts
Written by John Packard
March 22, 2019
There were a number of comments connected to the article we did on Thursday regarding Timna Tanners “Steelmageddon” opinion. Most of the comments in last week’s survey were against the Steelmageddon thought process which calls for the collapse of steel prices in a couple of years when the new capacity comes online.
As you can sense from the interview with Ternium, the mills believe we are in a growth market and the capacity is needed.
This will be one of the topics of conversation at this year’s SMU Steel Summit Conference. Registration is open and you can find more information on our website: www.SteelMarketUpdate.com/Events/Steel-Summit
Also on our website is information about our May 14-15, 2019 SMU Steel 101: Introduction to Steel Making & Marketing Fundamentals workshop. You can find more information on our workshop at 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
John Packard
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Final Thoughts
Another day, another massive gap between the news and market sentiment. On the news side, we’ve got war in the Middle East. The devastation facing western North Carolina coming into tragic focus. And the outcome of the presidential election remains a coin toss, according to current polling.
Final thoughts
There are markets where the headlines and the prices are both crazy. This does not appear to be one of them, at least not yet.
Final thoughts
Washington loomed large in our surveys this week. Two things actually: the upcoming presidential election and the trade case against imported coated products from 10 nations.
Final thoughts
Thanks to everyone who attended our Steel Hedging 101 workshop in Chicago on Wednesday. I learned a lot from StoneX Group’s Spencer Johnson, who instructs the course, and from your good questions. One thing that Spencer said sticks with me as I write this column. Namely, that momentum drives steel prices more than other commodity markets. If you watch steel futures, you’ll see up days and down days. But it’s rare to see the momentum shifting back and forth within any given day.
Final thoughts
SMU's prices ranges for flat-rolled steel were mostly sideways on Tuesday even as futures market shot higher. I got some questions as to why hot-rolled (HR) coil futures shot higher. As best as I can tell, it might have been in response to news that China plans to roll out stimulus measures. We have details on those measures here thanks to our colleagues at CRU. The chart below gives you some idea of just how sharply upward the move in HR futures was earlier on Tuesday: