Final Thoughts
Final Thoughts
Written by John Packard
September 4, 2019
Ferrous scrap prices are starting to settle as of today. Initial checks with some of our scrap sources found prime grades down $40 and obsolete grades down $30 in portions of the Midwest. We learned the Cleveland area mills bought busheling down $20 to $300/gross ton. We also learned of a purchase of HMS at $235/gross ton in Ohio as well. One of our pig iron experts predicted prices will have to move lower despite high iron ore prices. He reported an impasse between producers and consummers, but it will have to breakdown soon. The downward movement in pricing was expected and may help put pressure on flat rolled and plate prices moving forward.
California Steel Industries became the second mill to announce new coating extras. Based on our quick analysis, the CSI coating extras for galvanized steel are down 8 to 10 percent.
I contacted a couple of other coating mills who told me they were looking into their extras and would advise when something changes. My expectation is for most mills to make moves in their galvanized coating extras within the next week to two weeks.
Steel buyers should remain aware of zinc pricing and buyers of galvanized (and Galvalume where you need to watch zinc and aluminum pricing) need to be aware of the variations in extras from one mill to another. Steel Market Update does an analysis of coating extras on our website. You should look under the “resources” tab then “Steel Mills” to “Galvanized Extras” to “Coating Extras Comparison” which has been updated as of today.
If you are notified of any coating extra changes please forward them to info@SteelMarketUpdate.com or directly to me: John@SteelMarketUpdate.com
A reminder that our next (not yet sold out) Steel 101 workshop will be held in Fontana, California and will include a tour of the California Steel Industries steel mill. The dates for this workshop are January 7-8, 2020. We hope to have our registration page up and available within the next few working days.
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John Packard, President & CEO
John Packard
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Final thoughts
Unless you've been under a rock, you know by know that Nucor's published HR price for this week is $760 per short ton, down $65/st from the company’s $825/st a week ago. I could use more colorful words. But I think it’s safe to say that most of the market was not expecting this. For starters, US sheet mills never announce price decreases. (OK, not never. It has come to my attention that Severstal North America rescinded a price increase back on Feb. 14, 2012. And it caused quite the ruckus.)
Final thoughts
Is it just me, or does it seem like the summer doldrums might have arrived a little early? I could be wrong there. It’s possible we could see a jump in prices should buyers need to step back into the market to restock. I’ll be curious to see what service center inventories are when we update those figures on May 15. In the meantime, just about everyone we survey thinks HR prices have peaked or soon will. (See slide 17 in the April 26 survey.) Lead times have flattened out. And some of you tell me that you’re starting to see signs of them pulling back. (We’ll know more when we update our lead time data on Thursday.)
Final thoughts
Everybody has a plan… until they’ve dealt with volatility in the HRC market. While Mike Tyson’s original quote was about getting punched in the mouth, it’s unlikely the ex-champ has gone many pricing rounds with hot-rolled coil.
Final thoughts
Hold-rolled (HR) prices held roughly steady this week after slipping for much of April. I don’t have any spicy quotes to offer about mostly flat prices. Besides, a lot of the questions I’ve gotten recently have been about demand. Some of you tell me that it’s still stable or improving. Others tell me that it’s suddenly dried up.
Final thoughts
What a difference a month makes. In late March, it seemed like the US hot-rolled (HR) coil market was poised to cycle upward. Large buyers had re-entered the market and placed big orders earlier in the month. Several outages were underway or upcoming. And expectations were that lead times would continue to extend. Cliffs said […]