Final Thoughts
Final Thoughts
Written by John Packard
August 7, 2019
I have to apologize to those who are looking for insightful steel comments from me today. I’ve been busy with the final details of the 2019 SMU Steel Summit Conference, reviewing the SMU NexGen Leadership Award nominations and planning for the next few Steel 101 workshop locations and dates. My focus has been a little askew today.
I spent the vast majority of the day talking with speakers – Mark Millett of SDI, Ladd Hall of Nucor, Lynn Lupori from CRU, Timna Tanners from Bank of America Merrill Lynch, Paul Lowrey of Steel Research Associates, Chris Houlden of CRU, Chris Kuehl of Armada Corporate Intelligence… There will be a lot to talk about, and we have an excellent crop of speakers.
I can tell you the SMU Steel Summit Conference is going to be one incredible networking, information gathering, steel lovefest this year. This year’s conference will be the place to be seen. If you have not already registered, you can do so by clicking on this link.
The SMU room blocks at the Gateway and Atlanta Airport Marriott hotels have been exhausted. The Atlanta Airport Marriott Gateway, SpringHill Suites, Renaissance and Atlanta Airport Marriott have all been sold out (at least our room block is sold out). We have made arrangements for 50 additional rooms at the Westin Atlanta Airport Hotel, which is across the street from the Atlanta Airport Marriott. We will arrange for the shuttle bus servicing the Marriott to also service the Westin. To make a reservation at our room rate of $135 for a single bed and $155 for a double, the general reservation phone number is 404-762-7676; ask for the Steel Market Update or CRU room rate. We should have a link on our website sometime during the day tomorrow (Friday).
If you are having issues getting a room reservation, please send an email to Events@SteelMarketUpdate.com.
For those of you who plan ahead – the 2020 SMU Steel Summit will be Aug. 24-26.
We still have about 5-6 spots left for the Oct. 8-9, 2019, Steel 101 workshop in Cincinnati, Ohio. We will have a tour of the Nucor Gallatin facility as part of this workshop. You can learn more and register by going to www.SteelMarketUpdate.com/events/steel101 or contact us at Events@SteelMarketUpdate.com
The first Steel 101 workshop of 2020 will be in Fontana, Calif. (or that area, we haven’t selected the final hotel yet) and we will tour the California Steel Industries steel mill.
I hope by the time of our conference I will have most of the steel training workshop sites selected along with dates. I just need the time to get to everyone.
Renewals or looking to become a new subscriber to SMU? Please contact Paige Mayhair at 724-720-1012 or by email: Paige@SteelMarketUpdate.com. Paige will also be manning the SMU exhibition booth during the conference. Don’t forget to stop by and say hello.
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?