Final Thoughts
Final Thoughts
Written by John Packard
November 4, 2019
I have noticed many articles in the mainline press over the past few days slamming the Trump administration’s Section 232 tariffs as not helping the steel industry. Most of the articles point to the recent loss announced by U.S. Steel as proof, along with minimal to no job gains in the industry. I don’t think those writing the articles have spent much time looking at the investments announced by multiple mills, including U.S. Steel, and the impact this new capacity will have on the future competitiveness of the industry. Sure, there will be pain to come for those mills that are unable or unwilling to make investments in their future with new equipment. There will be older mills needing to close in order to make way for the new mills being built. The tariffs, along with antidumping and countervailing duties, have limited imports and allowed the steel mills some breathing room. Where the industry goes from here will depend on demand, both here and in the rest of the world.
In case you missed it, I have raised our Price Momentum Indicator on all flat rolled products from Neutral to Higher. This means SMU anticipates prices on hot rolled, cold rolled, galvanized and Galvalume to move higher over the next 30 days. The market is still in transition, and we did see some weakness in cold rolled and galvanized based on the information gathered from our survey so far this week. However, I do not believe the low numbers provided are still available in the market and may be more reflective of last week’s pricing. We will continue to work on better understanding steel prices as the rest of the week plays out.
Regarding plate, we are seeing a mixed bag with some believing prices will move lower, into the $500s, while others are pegging the market closer to $650 and anticipating a price increase on plate yet this month. For right now we are not seeing any indicators suggesting a change in momentum and have kept it at Lower for the time being.
I returned from London late on Sunday and I am just getting my Eastern Time Zone legs under me. I was very impressed with the meetings I had in London with CRU and, as I continue to learn more about the company and its history, I think the fit between SMU and CRU was the right deal for both parties.
I am working diligently on the 2020 SMU Steel Summit Conference. Right now, I am keying in on a couple of mill CEOs whose companies I believe will be on everyone’s mind come August 2020. While in London, CRU put on a panel that was killer, and I am going to try to have them reproduce the panel (with some tweaks for the markets we touch) at next year’s conference.
We have made an offer to a TV personality to speak at next year’s conference, someone I believe will have a tremendous perspective on the 2020 election. Yes, we will be in the middle of “crazy” by the end of August. Will our 2020 conference once again correctly predict the winner of the election?
If you have any questions about memberships, upgrades or pricing of our newsletters please contact Paige Mayhair at 724-720-1012 or by email at Paige@SteelMarketUpdate.com. You are also welcomed to contact me if you would like me to answer questions on any of our products. I can be reached at John@SteelMarketUpdate.com
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
SMU has heard from some larger buyers who have stepped back into the market to buy at prices that, if not at a bottom, they assess to be close to one. Is it enough to stretch out lead times and send prices upward again? Or do we continue to scrape along the mid-$600s per short ton (st) as we have been doing for most of the last month?
Final thoughts
Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves had some insightful things to say today about the steel market and about a conference we suspect might be Steel Summit.
Final thoughts
They say a picture is worth a thousand words. Well, when you add in some commentary from respected peers in the steel industry to those pictures, that may shoot you up to five thousand words, at least. In that spirit, we’ve added some snapshots from our market survey this week, along with some comments from market participants.
Final thoughts
I thought we’d have more clarity this week on Section 232, Mexico, and a potential carve-out for steel melted and poured in Brazil. As of right now, the only official comment I have is from the Office of the United States Trade Representative (USTR).
Final thoughts
There are just 40 days left until the 2024 SMU Steel Summit gets underway on Aug. 26 at the Georgia International Convention Center (GICC) in Atlanta. And I’m pleased to announce that it's official now: More than 1,000 people have registered to at attend! Another big development: The desktop version of the networking app for the event has officially launched!