Final Thoughts
Final Thoughts
Written by John Packard
March 29, 2019
I am going to be in the office for the next couple of weeks. My next trip is not until the 15th of April. We have quite a bit going on with a new flat rolled and plate steel market trends analysis (survey) starting first thing Monday morning. If you receive an invitation, please take a few moments to answer the first question at the bottom, which will then take you to the rest of the questionnaire. Brett told me the average time to respond to our questions is three minutes.
We will also begin the process of reviewing flat rolled and plate steel inventories on service center floors as of the end of March. At the end of February, we found inventories to be at 2.4 months of supply on sheet products. The information we are collecting is only being shared with the distributors who participate in our analysis. If you would like to learn more about the process and what information we are collecting, please contact us at info@SteelMarketUpdate.com.
Update on sponsorships and exhibition spaces available for the 2019 SMU Steel Summit Conference: We have one sponsorship spot available and four exhibition spaces. The sponsorship available is the break sponsor for Monday afternoon. Please contact Jill Waldman at Jill@SteelMarketUpdate.com or by phone at 303-570-6570 for more details.
A reminder that our next Steel 101: Introduction to Steel Making & Market Fundamentals workshop will be held in Davenport, Iowa, on May 14-15, 2019. This workshop will tour the SSAB steel mill. SMU has held dozens of workshops across the country and we have trained many hundreds of individuals associated with manufacturing, steel distribution, steel mills, trading companies, financial institutions and analysts, trucking and railroads as well as other suppliers to the steel industry. This two-day workshop is well suited for the newest of your employees as well as those who have been with the company for some time and are well-regarded as having the potential to move up within your organization. We even have had presidents and CEOs of companies attend for a refresher or to evaluate our program. The Steel 101 workshop helps provide the basics about the steelmaking and rolling process, how qualities of steel are produced and how commodities and market factors affect steel prices. You can learn more about the workshop agenda, instructors (all of whom are experienced steel professionals), hotel information, the costs to attend and how to register by going to: www.SteelMarketUpdate.com/Events/Steel101
I want our existing members to understand that we have changed our pricing and there is a significant advantage being given to companies who would like their employees to receive our newsletter. We have unlimited programs on both Executive and Premium level subscriptions. If you would like more information, please contact Paige Mayhair at 724-720-1012 or by email at 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
Getting back to the price increases I mentioned at the top of this article, to what extent are they aimed at raising prices and to what extent are they aimed at stopping the bleeding that was happening in the second half of May, before President Trump announced the 50% tariff?
Final Thoughts
We just wrapped another Steel 101 Workshop, where you take what you learned in the classroom into the steel mill.
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.