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    Analysis

    June 26, 2019

    Final Thoughts

    Written by John Packard

    I am being asked for my opinion regarding the price increase announcements, and specifically if the increases will “stick”?

    The announcements are not a surprise to me as some of our data was showing service center spot pricing in the area of “capitulation” (more than 75 percent of the service centers dropping spot prices to their end customers). We are also catching service center inventories as declining, although at 2.5 months of supply they may not be at levels yet where they are forced to buy. I mentioned in a recent article that the frustration in this market is the influence of the U.S. government with the Section 232 and 301 tariffs. Foreign steel in the past acted as a backboard for domestic prices. Without guidance from foreign pricing the domestic mills don’t seem to know where the bottom should be.

    John Packard

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