Final Thoughts
Final Thoughts
Written by John Packard
June 5, 2020
There is much to discuss, much to learn…
As trade attorney Lewis Leibowitz lays out in his article/opinion piece this evening, there are no easy solutions to issues built over decades. International manufacturing companies need to review their supply chains to ensure they are not doing business in countries potentially hostile to the United States. Steel mills are balancing supply against demand. Steel buyers are rethinking their sourcing strategies.
During a “normal” economy, the U.S. steel mills do not produce enough steel to satisfy domestic consumption. Even Barry Zekelman admitted that in the SMU Community Chat webinar we held with him a couple of weeks back. There are new mills under construction, but at the same time it appears old mills are going to be phased out.
One question that we will address during the 2020 SMU Virtual Steel Summit Conference is: Will the mills be able to balance supply with true demand, including items that are not being produced in the U.S. right now?
You will hear answers to that question and many more during this year’s SMU Virtual Steel Summit Conference. You can register for the event by clicking here.
We produced our SMU Service Center Inventories & Shipments “Flash” report for data providers last week. We will produce our full report for data providers and for Premium members shortly thereafter. If you are a service center and would like to participate (confidential basis), please contact Estelle.Tran@crugroup.com or John Packard at John@SteelMarketUpdate.com. If you would like to upgrade your membership to Premium, please contact Paige Mayhair at Paige@SteelMarketUpdate.com or 724-720-1012.
We are conducting one of our SMU flat rolled and plate steel market trends surveys this week. Look for your invitation in your email inbox at 8 AM ET on Monday. If you would like to participate in our surveys, please send a note to: Brett@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
Cleveland-Cliffs is seeking $750 per short ton (st) for hot-rolled coil. That’s $20/st above where the steelmaker had been. It’s also $30/st above Nucor, which is at $720/st this week. We've seen prices increase incrementally this week. SMU's HR price, for example, stands at $690/st on average, up $5/st from last week. The questions now are whether a number well above $700/st will stick, whether other mills will follow Cliffs, and whether there is enough demand to support higher prices.
Final thoughts
We got a little flack for adjusting our sheet momentum indicators to neutral last week. To be clear, we didn’t adjust them to lower. Part of the reason we moved them to neutral was because there are some unusual cross-currents in the current market. On the news side, you could make a case that there should nowhere to go but up.
Final thoughts
I think all of us know that sometimes courtships go wrong. A misplaced word or deed and soon things can go sideways, and not in the prices sense. Such could be the case with Japanese steelmaker Nippon Steel’s play for U.S. Steel.
Final thoughts
We’re starting to see some impacts of the big trade case filed last week against imports of coated flat-rolled steel from 10 nations. Namely, we’ve heard that a range of traders have stopped offering material from Vietnam. An alleged dumping margin of nearly 160% will do that. Especially amid chatter of critical circumstances.
Final thoughts
The phrase “political football” has been tossed around a lot lately. (Pun probably intended.) For the humble journalists at SMU who thought the week following Steel Summit would prove a quiet one… the news cycle had other ideas