Final Thoughts

Final Thoughts

Written by John Packard


The coronavirus is already changing my daily habits.

I walk around with a small bottle of Purell (or similar) hand sanitizer in my pocket.

I have a face mask in my car and I am no longer self-conscious about wearing it into a grocery store. Probably because everyone else is wearing a mask as well.

I move away (quickly) when somebody sneezes. I equate it to someone yelling “fire” in a movie theatre.

John Packard Summit 18I chat with my kids on Zoom or FaceTime about Netflix.

I am learning how to cook for one (which is kind of sad, but necessary).

Take out is considered “splurging.”

The phone is being replaced by Zoom, Skype, GoToMeeting as people want to see who they are talking to (a need to connect with people perhaps?).

I am close to my goal of 365 days without having to wear long pants….

Will COVID-19 Change the World’s Supply Chain?

This morning I was reading an article about how the Chinese have started holding up shipments of critical medical supplies and testing equipment. It caused me to reflect on if maybe this will be the catalyst to re-shore parts and products to the United States (or at least to USMCA countries).

I asked Alan Beaulieu of ITR Economics and Chris Kuehl of Armada Corporate Intelligence to comment on whether the COVID-19 pandemic and other recent events (such as trade actions) would “fundamentally” alter the supply chain.

Beaulieu told me, “I would avoid the word ‘fundamentally,’ but we do think this will alter the U.S. supply chain and thus impact China, in particular, and perhaps some other nations. We expect this to push more firms into near sourcing, be that the U.S., Canada or Mexico, probably with an emphasis on the U.S.”

Kuehl chimed in, “I think China was on the outs even before this due to the tariff/trade war. I have been talking to a lot of owners and officers and they are all saying the same thing. They really liked the people they have been working with in China and would love to stay connected, but there are too many barriers now. They know China trade will continue to be a political football as the Democrats like them less than the GOP. They know the COVID mess has damaged the reputation and has affected their suppliers and they figure it will happen again. 

“They are all chanting ‘diversify.’ They want to keep some activity in China, but are also opening up to lots of other nations in Asia, Latin America and even Africa. The catch is total landed cost. By the time they figure it all in, the U.S. doesn’t look so expensive anymore. They can do business in a calmer environment and not get priced out completely.” 

I would love to hear from manufacturing companies that are looking at bringing parts or products back to North America. You can reach me at John@SteelMarketUpdate.com

Our SMU Community Chat Webinars are going very well. We have been averaging more than 500 people registered for each of the first two webinars.

The next SMU Community Chat will be on Wednesday, April 22, and will feature an automotive specialist, Bernard Swiecki of the Center for Automotive Research. I think you will find Mr. Swiecki quite informed and worth the 30-40 minutes out of your day. Assuming I don’t forget to hit the “broadcast” button (that was this week’s boo-boo), we will begin promptly at 11:00 a.m. ET. Here is a link to the registration for the 22nd.

The following week – April 29 – we will host Ken Simonson, Chief Economist for the Associated General Contractors (construction).

The list to speak in May includes Timna Tanners, Metals and Mining Analyst for Bank of America Merrill Lynch and Chris Kuehl, Managing Director of Armada Corporate Intelligence (quoted above).

If it is time to renew your membership or if you would like to upgrade/add more people, please contact Paige Mayhair at 724-720-1012 or by email: Paige@SteelMarketUpdate.com

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

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.