• Skip to main content

    Analysis

    April 15, 2019

    Final Thoughts

    Written by John Packard

    I am making the following comments in my Final Thoughts section for a reason. My Final Thoughts is the area where I will sometimes provide my opinion or make comments regarding conversations that I am having about the market that I haven’t been able to totally put my finger on yet. I know that may sound a little confused, and that is what I am hearing from a number of buyers in the flat rolled market (confusion). Let me try to make the muddy waters a little less murky, but I doubt if the waters will be clear anytime soon.

    I spoke with a couple of service centers this afternoon who were reporting their company was losing an excessive number of orders. This led both executives to surmise that the $40.00/cwt base number they have on coated was no longer a competitive number. The president of one of the distributors told SMU they had run the numbers and the base price had to be around $37.50/cwt. I can’t tell you if that is an accurate number or not at this point. However, I did pick up a couple of “outliers” on galvanized and Galvalume in this week’s questionnaire that concern me…

    John Packard

    Read more from John Packard

    Latest in Analysis

    SMU Survey: Current and Future Steel Buyers’ Sentiment Indices rise

    SMU’s Current and Future Steel Buyers’ Sentiment Indices increased this week, according to our latest market survey.   Every two weeks, SMU polls thousands of steel-industry executives, asking them to rate their companies’ chances of success today and also three to six months down the road. We use their responses to calculate our proprietary Current and Future Steel Buyers’ Sentiment Indices, measures tracked since 2008.

    US heating and cooling shipments fall for third straight month

    US shipments of heating and cooling equipment slipped in September for a third consecutive month, according to the latest data from the Air-Conditioning, Heating, and Refrigeration Institute (AHRI). Shipments declined 2.6% month on month (m/m) in September, after having fallen 10% m/m in August. The monthly pace marks the third-slowest shipment rate year to date. Historically, shipments are strongest in early summer and weakest around the turn of the year, driven by seasonal air conditioner and heat pump volumes. AHRI's data shows September shipments totaled 1,687,240 units, down 2.6% m/m but up 7.7% year over year (y/y) (Figure 1, left). From August to September, shipments of warm air furnaces, A/C, and heat pumps declined, while water heater shipments rose. Compared with a year earlier, only air conditioners and heat pump shipments were higher.

    Final Thoughts: Do Mesabi Metallics and Hyundai-POSCO signal more foreign steel investment in US?

    Could two new steel projects signal a new direction in the marketplace? Both Mesabi Metallics’ recently announced steel facility in Iowa and the Hyundai-POSCO’s proposed mill in Louisiana are major undertakings. You don’t spitball a major steel mill and then start producing the next day. From initial concept to site selection and on up to the first melt, there is a labyrinth of permitting, planning, and construction to navigate before the first heat.