The service center and manufacturer executives who read Steel Market Update have been telling us for some time that they believe steel prices are near the bottom and poised to turn around soon. Our latest check of the market, with flat rolled steel prices up anywhere from $15 to $25 per ton, suggests the market may have turned a corner.
A price increase announcement from the EAF mills sometime soon would surprise no one. The integrated mills tried it about a month ago, but the move proved premature and prices gained little ground. This week, the majority (56 percent) of those responding to SMU’s market trends questionnaire said they believe steel demand has now improved to the point where such a price hike could be successful. That means 44 percent are still doubtful, though. Not exactly a slam dunk yet.
Here’s some of their comments:
“I believe the EAF producers will get an increase of no more than $40/ton, unless scrap continues to move down.”
“Prices are too low based on world economics right now.”
“Demand is truly picking up steam. We are very busy with all business segments of our company.”
“I think true demand is growing as many customers are telling me they were busier in July than June. The EAF mills are also telling me they are getting busier these days.”
“They are already [raising prices] one customer at a time.”
“I am not convinced they can get a big increase, but demand seems good enough they should be able to get some. Particularly if the increase isn’t too aggressive.”
“The Galvalume market is strong; however, other steel markets are not seeing the same amount of activity.”
“Lead-times are still fairly normal and it does not seem like service centers are that busy.”
“Maybe [an increase] would stop the bleeding.”
In other news, we published the final agenda today for the SMU Virtual Steel Summit. If you count the number of individual speakers, it totals 48! We have speakers from China, Australia, Germany, England, Chile, Mexico and Dubai, not to mention the U.S. When we said there was going to be a lot of content, we were not kidding.
Registrations for next week’s summit continue to mount, as the number of executives planning to “attend” is approaching the mid-700’s. Here are some of the companies that registered within the past couple of days: Caterpillar*, Midrex Technologies, Steel Manufacturing and Warehouse Co., Crown Equipment*, MetalMiner*, Kloeckner Metals, Vesuvius USA*, Hanwa (HAMCO), NLMK USA*, Willbanks Metals, Teck Metals Limited, Canam, BTD, Imperial Pools, Inc., Jemison Metals and Plateplus. You can join them by clicking here or going to www.SMUsteelsummit.com
On Wednesday, our virtual platform will open for all attendees, sponsors and exhibitors. There are a number of “demo” videos on the SMU Steel Summit website (www.SMUsteelsummit.com) Just click on “Demo Videos” in the toolbar at the top. The demo videos will assist you in navigating around, how to make an appointment with someone, help with networking, etc.
Tomorrow (Wednesday, Aug. 19) at 11 a.m. ET we will have an SMU Community Chat Webinar that will feature our “live” platform. You will be able to see what an attendee sees when he or she first enters the platform. We will answer as many questions as we can about the platform. You do not need to be a registered attendee to participate. Our hope is after you see what we have created, you will break down and spend less than $10 per speaker ($7.29 per speaker if you use the SMU and multi-person discounts) to join us. You can register by clicking here or going to www.SMUsteelsummit.com
As always, your business is truly appreciated by all of us here at Steel Market Update.
Tim Triplett, Executive Editor
Tim TriplettRead more from Tim Triplett
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.