We don’t get to choose when we were born. We don’t choose what natural disasters, epidemiological emergencies, stock market crashes, tyrannical regimes, or wars our generations face. We only get to choose how we react. (Professor Wendy Beth Hyman of Oberlin College to her students on March 11, 2020).
Thank you for bearing with us over the past few days as we gave our employees some well-deserved time off and we did not publish on Thursday of last week and again on Sunday.
We are now back and working on all cylinders. If you have any questions for us, please feel free to ask away: info@SteelMarketUpdate.com
Ferrous scrap started trading today at down $20 on obsoletes and down $40 on prime grades (bundles and busheling). Ryan McKinley, scrap expert for CRU, will discuss what he is finding on buying activity and supply when he speaks during our SMU Community Chat webinar tomorrow at 11 AM ET. The webinar is free to anyone who would like to attend. This is a good way to expose your junior executives, sales, purchasing and those who continue to work outside the office to what is going on in the industry. You can register for this free webinar by clicking here or by going to our website: www.SteelMarketUpdate.com/blog/smu-community-chat-webinars
We are conducting one of our flat rolled and plate steel market trends surveys this week. We will provide a sneak peek at a couple of items during tomorrow’s webinar. Otherwise, we will begin articles in the Thursday and Sunday night issues of SMU.
Our Service Center “Flash” report will go out to data providers tomorrow. If you are a service center selling prime flat rolled or plate products and you would like information about becoming a data provider, and what you receive for being a confidential data provider, please contact Estelle.Tran@crugroup.com or John@SteelMarketUpdate.com
We are now pushing 400 registered attendees for the 2020 SMU Virtual Steel Summit Conference including those added today: 3GM Steel, Luminus Management, FCA US LLC, Lennox International*, Caterpillar Mexico, Mitsui Steel, North American Steel, Trinity Industries, and Steel Technologies* (* denotes more than one person is registered). You can join the hundreds of companies who will be attending (and networking) if you click here. You can also find more information on our website www.SteelMarketUpdate.com and click on the SMU Virtual Steel Summit link on the site. You can see a more complete list of the registered companies by clicking on this link. The list is updated every few days.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO
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Latest in 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.
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.