Final Thoughts
Final Thoughts
Written by John Packard
May 27, 2019
Editor’s note: John Packard is on vacation.
It appears many steel buyers are holding off on purchases while they wait to see if imports resume from Canada, Mexico and Turkey now that President Trump has reversed himself on the Section 232 tariffs. “Lead times are stagnating/shortening and the mills are in full negotiation mode,” said one steel executive this week, which helps to explain the declining steel prices reported in this issue.
Other telling comments from SMU’s latest market canvass:
“Like most buyers, I won’t buy at this level for fear of prices going lower. I’m concerned about how weak the market is.”
“I am not buying much these days. Like everyone else, we are becoming more cautious about 2H19 and I am pulling inventory down. The shrinking mill lead times allow us to have less on order because we can get it more quickly now.”
“Lead times are shorter than normal. We’re seeing mill production orders at both EAFs and integrated suppliers producing early. The mills are willing to negotiate.”
“We haven’t seen any new offers on products out of Mexico, Canada or Turkey yet. I think they will be cautious and try to stay under the radar.”
“Suppliers representing Turkish tons have gotten in touch. However, given the falling domestic market, and the remaining 25 percent tariff, I don’t think Turkish steel will be competitive as of now on flat-rolled.”
“It’s a tough market. It does appear we are getting close to the bottom. The question is, what will be the catalyst to reverse the momentum?”
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John Packard
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