Final Thoughts
Final Thoughts
Written by John Packard
July 19, 2019
Tomorrow we will begin our mid-July flat rolled and plate steel market trends analysis. This means we will have more information regarding pricing (Tuesday), lead times and negotiations (Thursday) and Sentiment and service center spot (Thursday or Sunday) along with other information developed through our questionnaire. If you would like to be included as a data/opinion provider, please contact me
Nine business days left for you to nominate a young person from your company for the 2019 SMU NexGen Leadership Award. The deadline is by the end of business on August 1, 2019. The benefits of receiving this award are huge for the person who ultimately wins. A mentorship day with SDI CEO Mark Millett, free registration for a future (2019 or 2020) Steel 101 or Steel 201 workshop, free registration to the SMU Steel Summit Conference (2019 and 2020), physical award for their work place, cocktail party at this year’s conference, video of them getting the award and more. Go to www.SMUAward.com for more details or contact me at 800-432-3475 or on my email: John@SteelMarketUpdate.com
Registrations continue for the 2019 SMU Steel Summit Conference. We are closing in on 900 registered attendees. Here are some of the latest companies to register executives: Steel and Pipe Supply, North American Stamping Group, PPG, J.P. Morgan, Nucor, Steel Dynamics, LSI Industries, AOC Metal Works and Nippon Steel Trading Americas. For more information about the conference and to register click here.
A special thank you to Metal Miner for allowing us to reprint the interview they did with CRU Analyst Josh Spoores. Josh will be one of our speakers opening the conference on Monday, August 26 at 1 PM.
For the first time at a SMU Steel Summit Conference I will be speaking about a couple of our proprietary indices, including our Service Center Inventories Indices on flat rolled and plate. If you are not a data provider, you will want to be there to learn more about how we got to here and where we will be going with our index. The index will be shared with PREMIUM level members beginning in September.
Steel 101 registrations are still open for the October 8-9 workshop in Cincinnati, Ohio with a tour of the Nucor Gallatin steel mill. Details can be found at www.SteelMarketUpdate.com/events/steel101
Many of you will be coming up for renewal for our newsletter. Please contact Paige Mayhair at 724-720-1012 or by email: Paige@SteelMarketUpdate.com and she can discuss upgrading to Premium or expanding to a Regional or Global arrangement where you can share the newsletter with all the people in your company if you so choose. Paige can also help with your renewal for the existing level (note: we no longer have a single person level. We want you to open-up more people to our newsletter). See Paige for details.
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
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.
Final Thoughts
I think there is an obvious case for sheet and plate prices going higher from here. That’s because, on a very basic level, the floor for flat-rolled steel prices, which is typically provided by imports, is now significantly higher than it was a week ago.
Final Thoughts
We're about to hit 50% Section 232 steel tariffs. What could happen?