Final Thoughts

Final Thoughts

Written by John Packard


Waiting for the rainbow.

Don’t get me wrong, the weather here in Florida is absolutely perfect today (and has been all winter). Sky is blue. Birds are singing. Flowers are blooming.

Inside it feels like it is raining. Actually, it feels like the thunderstorms are gathering. You can see the high tops of the clouds shooting up into the sky, and there is a high level of anticipation that it will soon be pouring rain.

Those of us who have been in the steel industry for a long time notice the clouds, but prefer to think about the rainbow that will surely come after the rains are gone.

John Packard Summit 18There are some hard times coming for the economy and probably for all of you in the industry. How hard is totally unknown right now and will depend on how well the government can contain the unseen enemy and how quickly confidence will return to those in our industry (and the consuming public).

Grand Steel shared a note to their employees that I feel exhibits the optimism and caring our industry has for the people within the industry as well as those out there who are working hard to protect lives.

Grand Steel is celebrating their 25th year in business. They are a small to medium sized privately held service center operating out of Michigan. Here is part of what they told their employees today:

“…As we begin our 25th year as a company, especially under the circumstances, we want all of you to know a few things: We have always felt that in our company exists a family atmosphere. To that end, we feel a responsibility to all GSP employees to keep everyone working during these tough times. We are all navigating these uncertain times together and will do everything possible to get through. We may have to make sacrifices personally and/or professionally to get through, but this too shall pass.

“As a way to express our gratitude for each and every one of you, there will be a small ‘enhancement’ to your next paycheck. ***Optional*** If any part of the ‘enhancement’ is pledged back to support our healthcare professionals fighting COVID-19 on the front lines, Grand Steel will match the amount and we will find a good cause to support.”

I want to commend Mike Barnett and the Grand Steel team for their support of their employees and their generous offer to the healthcare community.

Going forward, Steel Market Update is going to put this kind of information and other “bits and pieces” of news about the industry in a section in our newsletter we are going to call SMU Community News. Look for it in upcoming issues. If you have something you would like for us to include, or if you have a question that you would like for us to respond to, please send to: info@SteelMarketUpdate.com

We have now written four articles regarding our Thoughts on Working from Home. As an FYI – we have added the articles to the drop-down menu under the “Resources” tab. If you have suggestions for future articles on the subject, please let us know by using the info@SteelMarketUpdate.com email address.

Be safe, wash your hands and soon wear your mask when in public places…

‘Challenging times? Difficult market conditions?

We’re here for you…we are a community and we’ll get through this.

Non-subscribers please Contact Paige@SteelMarketUpdate.com for several weeks of premium access; on us.’

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

I’ve had discussions with some of you lately about where and when sheet prices might bottom. Some of you say that hot-rolled (HR) coil prices won’t fall below $800 per short ton (st). Others tell me that bigger buyers aren’t interested unless they can get something that starts with a six. Obviously a lot depends on whether we're talking 50 tons or 50,000 tons. I've even gotten some guff about how the drop in US prices is happening only because we’re talking about it happening.

Final thoughts

We’ve all heard a lot about mill “discipline” following a wave of consolidation over the last few years. That discipline is often evident when prices are rising, less so when they are falling. I remember hearing earlier this year that mills weren’t going to let hot-rolled (HR) coil prices fall below $1,000 per short ton (st). Then not below $900/st. Now, some of you tell me that HR prices in the mid/high-$800s are the “1-800 price” – widely available to regular spot buyers. So what comes next, and will mills “hold the line” in the $800s?