Final Thoughts
Final Thoughts
Written by John Packard
July 12, 2019
We should get a better handle and read on the market, and the strength of the market over the next one to two weeks. The Fourth of July Holiday is over, people are returning to work and decisions are going to have to be made regarding purchases for September through fourth quarter. As you can see from an earlier article in tonight’s newsletter, I have adjusted our Price Momentum Indicator to Higher from Neutral. We adjusted to Neutral right after the first price announcement, and I think we have seen enough evidence to conclude that at least over the short term prices should stabilize and rise.
Whether this is a “dead cat bounce” is yet to be determined. We saw a typical dead cat bounce earlier this year after the January and February price announcements. It took about 60 days for the full “bounce” to take effect. Stay tuned.
I will be in the office all this week. No more holidays between now and the SMU Steel Summit Conference. Attendance looks like it will be another record (fingers crossed we will reach my goal of 1,000 executives).
SMU Events App will be released at the end of this week. That will give you five full weeks to prepare for dinners, break meetings, conversations, who to meet. The convention center will be set up so that you can have meetings without having to leave the premises. We have great sponsors and exhibitors this year. This will be a dynamic conference. Go to www.SteelMarketUpdate.com/events/steel-summit for more details and to register.
If you need help with registration: Events@SteelMarketUpdate.com This goes to our London offices and they will contact you to get you registered or deal with any issues that you might have. You can also reach out to Paige@SteelMarketUpdate.com or 724-720-1012 and she can assist you from our Pittsburgh office.
If you are totally stymied or just want to vent, I am here for you – John@SteelMarketUpdate.com or 800-432-3475.
You can register for the next Steel 101 workshop, which will be in Cincinnati on Oct. 8-9, and we will be visiting the Nucor Gallatin steel mill for the first time. Go to www.SteelMarketUpdate.com/events/steel101 for details, costs and how to register.
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: