Final Thoughts
Final Thoughts
Written by Tim Triplett
August 26, 2020
Claiming national security concerns over a slump in the U.S. steel market, President Trump issued a proclamation late Friday that appears to amend the quota limits on Brazil, further restricting steel imports from South American nation. While it’s unclear at this point which products will be affected and to what degree, one source tells SMU the change may further limit imports of Brazilian slabs in the fourth quarter.
The president’s proclamation states: “The United States will lower, for the remainder of 2020, one of the quantitative limitations set forth in Proclamation 9759 applicable to certain steel articles imported from Brazil. In my judgment, this modification will preserve the effectiveness of the alternative means to address the threatened impairment to our national security by further restraining steel article exports to the United States from Brazil during this period of market contraction.” Click here to read the entire proclamation. Look for further details in Tuesday’s SMU.
On another subject, here’s some of the more quotable quotes from SMU’s Steel Summit this past week:
“We are all in an international market riding a bus where the driver of the bus is China, and he is taking us wherever he needs to go.”
Jose Gasca, Metrading International AG, on China’s dominance in the global steel market.
“I don’t know of any steel company in the world that is aiming to have a smaller participation in the auto industry.”
Lourenco Goncalves, Cleveland-Cliffs CEO, when asked if Cliffs’ subsidiary AK Steel is too dependent on the automotive market.
“Go ahead and underestimate us, that is going to be fun.”
David Burritt, president of U.S. Steel, on his company’s “best of both” strategy to combine integrated and EAF steel production.
“Seventeen million tons came offline abruptly during the crisis. We think only about half will come back and will offset the 6-7 million tons of real capacity that is actually coming onto the marketplace. We don’t believe there is anything to worry about.”
Steel Dynamics President Mark Millett, downplaying concerns about a “Steelmageddon” scenario in which mills like SDI’s planned expansion in Texas will oversupply the market and drive down steel prices.
“If EAFs can crack exposed body panels, it becomes tenuous to be an integrated mill.”
Analyst John Anton of IHS Markit on the possible competitive shift among suppliers to the auto sector if minimills succeed in producing sheet products of high enough quality for the most demanding vehicle applications.
“It’s not an expectation, it’s a reality.”
Big River Steel President David Stickler on the likelihood minimills will compete for the automotive market’s exposed panel business.
“The economy is not broken.” And: “Don’t assume the election will make or break your world.”
ITR Economics President Alan Beaulieu, offering a reassuring forecast on the U.S. recovery.
Thanks again to all those who attended and supported our virtual steel summit. Remember, the conference platform remains open and the programming accessible until Sept. 18.
As always, your business is truly appreciated by all of us here at Steel Market Update.
Tim Triplett, Executive Editor
Tim Triplett
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Final thoughts
SMU has heard from some larger buyers who have stepped back into the market to buy at prices that, if not at a bottom, they assess to be close to one. Is it enough to stretch out lead times and send prices upward again? Or do we continue to scrape along the mid-$600s per short ton (st) as we have been doing for most of the last month?
Final thoughts
Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves had some insightful things to say today about the steel market and about a conference we suspect might be Steel Summit.
Final thoughts
They say a picture is worth a thousand words. Well, when you add in some commentary from respected peers in the steel industry to those pictures, that may shoot you up to five thousand words, at least. In that spirit, we’ve added some snapshots from our market survey this week, along with some comments from market participants.
Final thoughts
I thought we’d have more clarity this week on Section 232, Mexico, and a potential carve-out for steel melted and poured in Brazil. As of right now, the only official comment I have is from the Office of the United States Trade Representative (USTR).
Final thoughts
There are just 40 days left until the 2024 SMU Steel Summit gets underway on Aug. 26 at the Georgia International Convention Center (GICC) in Atlanta. And I’m pleased to announce that it's official now: More than 1,000 people have registered to at attend! Another big development: The desktop version of the networking app for the event has officially launched!