Reinventing Our Lives.
As I have mentioned before, the COVID-19 pandemic is a health issue, not a political issue. Social distancing and the wearing of a mask are appropriate health decisions being made to protect those around you. Your protection comes from those around you also wearing a mask and being aware of how close they are to you.
Like many of you, I resisted having to wear a mask. It seems so un-American.
The reality on the ground has altered my thinking. I still do not like a mask (my glasses fog up when I wear it inside a grocery store) but I understand why it is necessary.
Our lives have been radically altered by COVID-19. However, the amount of disruption may well depend on where you live in the country, and how well your family, town, county or state has managed social distancing/wearing of masks in order to control the number of infections of the coronavirus.
I am sitting here in Florida about 80 miles north of Miami. During the first few months of the pandemic (late February, March, April and into mid-May) the area I was in was isolated enough from hot spots like Miami that we felt safe.
However, a contagious virus that cannot be seen or controlled only needs one carrier, and we are seeing that in Florida and around the country.
The governor of Florida opened the state around Memorial Day as cases were continuing to expand around the state. The beaches are open, restaurants are open, bars are open, gyms are open. The result is the state is now setting new records for the number of infections every day. We topped 5,500 new cases yesterday, and the state total (which is in question as being under reported) stands at 114,000+ cases.
There was a record number of new cases across the United States yesterday – 36,880 (2.3 million). The U.S. has 4 percent of the world’s population and we have 20 percent of the world’s cases and deaths.
The CDC (www.cdc.gov) released new information today as to who is at risk for dying from COVID-19. They expanded those at risk which you can find here.I will tell you one thing we are finding in Florida, young people are getting the virus, and some of them are dying.
My worry now is less about our decision to take our conference virtual (which was obviously the right choice), but what the business landscape will look like on Aug. 24 when we kick off the SMU Virtual Steel Summit Conference?
There are a lot of moving pieces, including a presidential election, which will come into play by the time of our conference. We will be perfectly situated to tap into the 20+ industry executives, economists and consultants who will speak as to what companies should be doing over the remainder of 2020 and looking into 2021. We will provide economic scenarios and forecasts. This year information is going to be critical, and we will have the experts.
Plus, you will have a unique networking experience while in the SMU Virtual Steel Summit platform. We will have more on this in the coming days, including a webinar(s) on the conference to give you a better feel as to how this is going to work, and why you and your company need to attend.
To register for the conference, click here.
Next week we will host Ryerson’s President & CEO Eddie Lehner during the SMU Community Chat. I spoke with Eddie yesterday, and I think he will have some interesting things to share with our SMU community. The webinar is free to anyone who wishes to join us. You can register by clicking here, or you can go to our website (www.SteelMarketUpdate.com) and click on the SMU Community Chat tab, and then the SMU Community Chat Webinar tab in the dropdown screen. There you can find registration for our next webinar, and recordings and PowerPoint presentations from previous webinars.
If you have any questions about renewing your membership, upgrading to Premium or adding more people (highly encouraged), becoming a new subscriber to our services, or just have questions about SMU, please contact Paige Mayhair at 724-720-1012 or 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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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.
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?
Everyone knows the old saying that “a picture is worth a thousand words.” Just because it’s a cliché doesn’t mean that it’s wrong. A lot of inked has been spilled trying to figure out why prices are falling now. I thought it might be as simple as this: Market dynamics in the fourth quarter (UAW strike, companies buying ahead of an anticipated post-strike price spike, etc.) pulled forward restocking activity that typically happens in the first quarter.
What a difference a month makes. There are a few full bulls left in the room, but their numbers are dwindling. We’ll release results of our full steel market survey tomorrow afternoon. I took a sneak peak at the data on Thursday. And more people than I expected think that US hot-rolled (HR) coil prices will be in the $700s per short ton (st) two months from now. Vanishingly few think prices will be above $1,000/st in mid-April.
Sheet prices have fallen again this week on shorter lead times, higher imports, and potentially higher inventories. (We’ll see for sure when we release our service center shipment and inventory data next week.) I remember reporting almost exactly the same thing about a month ago and getting a fair amount of pushback. Not so much these days.