Final Thoughts

Final Thoughts

Written by John Packard


John Packard is traveling…

Here’s what readers of Steel Market Update have learned this week. Steel prices continue to slide. By Steel Market Update’s calculation, the benchmark price for hot rolled steel now averages $515 per ton. That’s the lowest in 2019. Given the widespread reports of disappointing demand, worsened by the strike at GM and ferrous scrap prices that have declined sharply over the past two months, steel prices most likely have not yet hit bottom.

That downtrend is reflected in SMU’s latest lead times and negotiations data. Shorter lead times mean the mills have fewer orders to process. Average lead times for spot orders of hot rolled have continued to inch downward to just three and a half weeks. Almost all of the steel buyers responding to SMU’s latest questionnaire report that prices are very negotiable as the mills lack much leverage in the current market conditions. SMU Steel Buyers Sentiment, to be covered in Sunday’s edition, reflects a market growing still more pessimistic.

Nearly 60 percent of steel buyers tell SMU that demand for their products and services is declining. Almost all the rest see demand remaining about the same. Just a small single-digit percentage report improving demand as of early October. As one service center executive commented: “Volumes have been off considerably over the past two months.” Added another: “The GM strike is starting to be felt throughout the supply chain.”

SMU has reached out to various processors and other sources this week to try to get a sense of how the GM strike is affecting the metals supply chain as the work stoppage nears a month in duration. Almost none have responded, which suggests the news may be bad and they don’t want to talk about it. How has the GM strike impacted your business? Help us shed some light on this situation. Please send me a note at Tim@SteelMarketUpdate.com. All those who comment will remain confidential.

SMU’s sold-out Steel 101 Workshop in Cincinnati, including a tour of the Nucor Gallatin mill, was well-received by particpants. To be sure to get a spot for the next Steel 101, register now. The workshop will be held in Ontario, Calif., Jan. 7-9, and include a tour the California Steel Industries mill. For more details and to sign up, visit: www.SteelMarketUpdate.com/Events/Steel101

As always, your business is truly appreciated by all of us here at Steel Market Update.

Tim Triplett, Executive Editor

Latest in Final Thoughts

Final thoughts

What's the tea in the steel industry this week? Here's the latest SMU gossip column! Just kidding... kind of. Yes, some of the comments we receive in our weekly flat-rolled market steel buyers' survey are honestly too much to put into print. Some make us laugh. Some make us cringe. Some are cryptic. Most are serious. We appreciate them all. Below are some highlights from our survey results this week. Some of the comments that we can share with you are also included, in italics, in the buyers' own words, with minimal editing on our part.

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.)