Final Thoughts

Final Thoughts

Written by John Packard


I have been in Pittsburgh these past two days attending the Metalcon show. I will return to my office on Friday afternoon.

I spoke with a service center who is a large supplier to General Motors Tier One and Tier Two. GM built inventory going into the strike and continued to take shipments for one and a half weeks after the strike began. This supplier was told to start shipping again on Monday.  The expectation is for a return to normal schedules quickly. There should be minimal impact on prices or lead times as things return to normal flows.

John Packard

Perhaps the biggest impact will be on the psychology of the market. Having GM back to work may prompt some of the OEMs to start buying again. The mills at the Metalcon show have been telling me their business is good, prices suck (of course) but the orders are coming in.

One mill put a date (tongue in cheek) of 18 days for market spot prices to reach the bottom. My opinion, and that of a few of the very large service center buyers, is we probably already hit the bottom of this cycle. The question, which I addressed in an article earlier in tonight’s issue, is how high can prices bounce and how long will the bounce last?

The information I have been gathering from the Metalcon show, which is filled with mostly metal building, roofing and other construction-related companies, is that business is good and next year is not looking bleak. If the early projections hold true, it will be a good sign as metal buildings tend to lead the markets (along with recreational vehicles).

The rumor that our California Steel 101 workshop is sold out is incorrect. We still have plenty of seats available for the Jan. 7-8, 2020, workshop. You can find more details about the program, our instructors, costs and how to register on our website: www.SteelMarketUpdate.com/Events/Steel101

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

John Packard, President & CEO

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Final thoughts

Last week was a newsy one for the US sheet market. Nucor’s announcement that it would publish a weekly HR spot price was the talk of the town – whether that was in chatter among colleagues, at the Boy Scouts of America Metals Industry dinner, or in SMU’s latest market survey. Some think that it could Nucor's spot HR price could bring stability to notoriously volatile US sheet prices, according to SMU's latest steel market survey. Others think it’s too early to gauge its impact. And still others said they were leery of any attempt by producers to control prices.