Final Thoughts

Final Thoughts

Written by John Packard

As we worked through pricing data this week, it was evident that much of the spot buying has occurred over the past couple of months. In our HARDI steel conference call this morning, those on the call who reported their inventory levels told the group they were either carrying inventories that were higher than normal or balanced. We did not hear anyone say their inventories were low and needed to be replenished.

At the same time, the HARDI members reported demand as being much better than January 2019, and in many cases better than what they anticipated going into the New Year.

John Packard Summit 18

We have this interesting situation developing where some steel buyers are holding back, believing steel prices will fall in the coming days or weeks. At the same time their own order books are quite good and expected to stay that way.

Late today I was speaking with the owner of a service center who told me he thought “the party was over” when it came to the steel mills collecting more price increases. “The last forty-dollar increase is not holding,” he said, adding he had heard of at least one flat rolled mill “having a hole” in their hot rolled order book. That was considered a negative.

At the same time, this distributor told me his business was quite strong. Spot sales were good, contracts were being released better than anticipated. After telling me how negative he was on the market, he said, “The one thing that could keep this thing going is a positive surprise on the demand side. That would be a good thing.”

Right now, I am not negative on the market as the conversations I have been having with steel buyers are indicating good demand. Granted, I have not yet spoken to those in the energy business, nor do I have a good feel at this moment about automotive demand, but until I get solid indications of poor demand in the market we will continue to have our Price Momentum Indicator point toward higher steel prices.

Having said all of that, you may notice that most of our indices were lower this week compared to last. This is not a positive. We will continue to work on why this has happened. Is this a correction from SMU being a tad high this past week or something more ominous? We will spend more time speaking with our data providers and report back to our readers. Stay tuned.

Congratulations to Nucor, ArcelorMittal and Steel Dynamics for being named to Fortune’s list of the World’s Most Admired Companies for 2020.

Speaking of steel mills, Steel Market Update will be conducting our next Steel 101: Introduction to Steel Making & Market Fundamentals Workshop in cooperation with the NLMK Portage, Ind., steel mill, which we will tour on Tuesday, March 31, 2020. Our workshop will be conducted over two days: March 31 and April 1 in Merrillville, Ind. Registration is open, and we anticipate this will be another sold out workshop. You can find more details on our website:

Speaking of registration, the SMU Steel Summit Conference is way ahead of last year’s pace, and we expect close to 1,200 executives will attend this year’s event, which will be held on Aug. 24-26 in Atlanta. I was speaking with one of the mill CEOs earlier today and I know he has blocked those dates on his calendar…. I promise another strong agenda and group of speakers. We will have some of the “tried and true” such as Dr. Alan Beaulieu of ITR Economics, and we will have some brand new like Ryan Avery ( Come join us in Atlanta. You can register by clicking here.

While we are trying to get you to spend money…we are offering an opportunity for companies that want to renew, upgrade or expand their existing subscriptions and not pay the price increase that will go into effect on Feb. 1, 2020, by contacting Paige Mayhair and pay for the renewal, upgrade or expansion by the end of this month. Paige can be reached at 724-720-1012 or by email at

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

John Packard, President & CEO

Latest in Final Thoughts

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.