Final Thoughts
Final Thoughts
Written by John Packard
February 24, 2020
We have adjusted our plate price momentum indicator from neutral to lower. Prices have been dropping over the past couple of weeks, and steel buyers are very negative on the markets right now (see some of the comments in an article above).
I have to tell you I am really struggling with all of the information I am collecting as I try to determine whether flat rolled price momentum is on the side of the steel mills, uncertain, or on the side of the steel buyers. Prices have been sliding recently and did again this week based on the data we collected. At the same time, some steel buyers are reporting extended mill lead times and anticipate higher scrap numbers coming next week (our sources are reporting a “strong sideways” to up $20 depending on the market and product). A few buyers have told SMU the steel mills are becoming more rigid in trying to hold their existing numbers. We are also hearing whispers of a pending price announcement out of the domestic mills as they attempt to stop the slide and stabilize the markets.
We are keeping our flat rolled price momentum indicator at lower for now based on the prices collected this week. However, my gut feel is we are close to a bottom unless the coronavirus begins to affect businesses here in the United States.
Stay tuned.
We will have a total of 27 sponsors for the 2020 SMU Steel Summit Conference. Of these, 20 spots are confirmed and two are tentative. This leaves five spots currently available. I want to say thank you to all our sponsors as well as our exhibitors for this year’s conference. Here are the sponsors for this year’s event:
Platinum Conference Sponsor: Red Bud Industries
Gold Sponsors: Kenwal Steel, Mill Steel, Bank of America, Crowe LLP, Big River Steel, Pacesetter, Heidtman
Silver Sponsors: Delta Steel Technologies, Nucor, Steel Manufacturers Association, BMO, Magic Coil Products, CME Group
Bronze Sponsors: Acero Prime, MidWest Materials, Paragon Steel, Alliance Steel, Ratner Steel
We are waiting for final confirmation of sponsorships from Ternium and Interlake Steamship Company.
If you would like to know what sponsorships are still available, please contact Jill Waldman at 303-570-6570 or by email: Jill@SteelMarketUpdate.com
This year we have 36 exhibition booths in our newly expanded exhibition area. Of these, 26 booths have been reserved, leaving 10 available should your company have an interest in reaching out to the anticipated 1,200 executives attending this year’s conference.
The current exhibitors are: XOM Materials, Red Bud Industries, Alcos, Andes Coil Processors, Ryder Dedicated Transportation Solutions, Braner USA, Inc., Riteload, Ryerson, Delta Steel Technologies, Dienes, Bank of America, Reibus, Crowe LLP, Pacesetter, Mobius Risk Group, Big Ass Fans, AkzoNobel Coatings, Inc., Georg, CRU and Steel Market Update.
If you would like to exhibit at this year’s event, please contact Jill Waldman.
Our next Steel 101 workshop is now two-thirds full. We still have seats available for the March 31-April 1 workshop, which will be held in Merrillville, Ind., just outside of Chicago. We will tour the NLMK Portage steel mill. You can find more details by clicking on this link.
A reminder that I will be out of my office beginning Thursday of this week and will not return until Friday of the following week (March 6).
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
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 […]