As if a pandemic wasn’t enough, now I have to muddle through a tropical storm (it was a hurricane but lost some of its punch overnight on Saturday). Fortunately, Florida residents consider tropical storms as nothing more than a nuisance. I have my fingers crossed that we don’t pick up a hurricane until after our conference is over….
Congratulations to Mark Bush who was named the CEO for JSW USA.
It is going to be a busy week with a new flat rolled and plate steel market trends survey beginning at 8 a.m. on Monday morning. Our service center data providers begin providing inventory and shipment data Monday as well. We should have a better feel for any shifts in momentum by the end of this week, although my gut feel is we are close to a bottom, if not at the bottom on hot rolled prices (with the low end being in the very low $400’s per ton).
We have not yet named a speaker for this Wednesday’s SMU Community Chat Webinar. We should have one confirmed in the morning, and we will advise as soon as we do.
Registrations are breaking through 600 executives and counting for the 2020 SMU Virtual Steel Summit Conference. If you register by Aug. 5 you will be eligible to receive one of our welcome packages. Yes, we are sending a welcome box from SMU as well as a number of our gold and platinum sponsors. You can register by clicking here or going to www.smusteelsummit.com
Here are some of the companies who registered for the 2020 SMU Virtual Steel Summit Conference late last week: Komatsu Mining Corp, Colakoglu Metalurji A.S., Wayne Brothers, Inc., Argus Media, UBS Securities*, NB Handy, Flack Global Metals*, Stelco, Griffin Trade Group, Metal One America, Steel & Pipe Supply, Jade Metals Corp, Viking Materials Inc., High Steel Service, Apex Tool Group, EXLTUBE*, ArcelorMttal Dofasco* (those with an * means more than one person registered). You can join them by clicking here or going to www.smusteelsummit.com
This will be another hectic week for me as we continue to prepare for our first virtual steel conference. If you are wondering about our platform, you can view the recording made last week during our SMU Community Chat when we unveiled the platform and explained how it will work. You can view the recording by clicking here or going to: www.SteelMarketUpdate.com/blog/smu-community-chat-webinars
If you want to renew, upgrade or join Steel Market Update, 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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Latest in Final Thoughts
What are some “Black Swans” to watch out for? With the war in Ukraine entering its third year, your mind might understandably move to conflicts overseas. Here is one closer to home to consider: US trade relations with Mexico taking a turn for the worse. I mention that because the Office of the United States Trade Representative (USTR) dropped a (virtual) bombshell earlier this month.
Domestic prices have been sliding since the beginning of the year, and I don’t see any obvious reasons why the slide might stop this week. But let’s put the timing of a bottom aside for a minute. The question among some of you seems to be whether we’ll see another price spike, or at least a “dead-cat bounce,” before the typical summer doldrums kick in.
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.