Final Thoughts
Final Thoughts
Written by John Packard
October 12, 2020
Nucor Tubular Products led the pipe and tube manufacturers announcing a $50 per ton price increase this morning on HSS, pipe, mechanical and piling products. EXLTUBE advised they were following the Nucor lead and announced their fourth price increase on HSS and A53B products matching the Nucor $50 per ton.
New orders for foreign steel are growing as domestic steel prices rise and lead times extend. The combination of both is making foreign more attractive to domestic companies. Trading companies have advised me that coated steel, especially Galvalume, is seeing quite a bit of activity. One trader of Galvalume told me his order book was as strong as it has been since just prior to Section 232’s being announced. We will be doing more reporting on imports in the coming days. Foreign steel offers may cap (or at least pressure) how high domestic prices can go up from here.
An item of interest in this week’s survey is about what the industry thinks will happen to Section 232 tariffs come March 2021. Here is a sneak peek – only 2.5 percent of the respondents (so far) believe the tariffs will be removed. The majority believe they will remain as is, with about 45 percent of those responding believing there will be adjustments to the exclusions (such as eliminating slabs or adding European countries to the list of countries excluded from the tariffs). Many of the comments referenced a President Biden “having bigger fish to fry” in the early days of his potential administration….
We may be in a pandemic, but the need for education about the industry continues. SMU will conduct our first “virtual” Steel 101: Introduction to Steel Making & Market Fundamentals Workshop on Oct. 20-21. We are using the same instructors as our live event and have replaced the mill tour with videos of the equipment, which in many ways is more instructive than going to an actual steel mill (albeit less exciting). We have plenty of spots available for those who would like to learn about the steelmaking process, understand the differences between EAF and fully integrated steel mills, know what residuals are and how they impact the quality of the steel you may be buying (or selling). You will also learn about the futures markets, how steel is bought and sold, and some of the key issues that affect steel prices, supply, etc. If you would like to learn more, or if you would like to register for next week’s event, please click here. You are also welcome to ask me questions. I can be reached at John@SteelMarketUpdate.com
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John Packard, President & CEO
John Packard
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Final Thoughts
I’m trying to make sure this is not a TL;DR Final Thoughts. As a journalism school professor once told me, ‘No one but your mom reads more than 1,000 words.’ Also, as the old adage goes, a picture is worth a thousand as well. With that in mind, below are a couple of charts that I think go a long way toward explaining how prices and lead times have been relatively stable despite concerns about demand.
Final Thoughts
It’s another week of big headlines for the world writ large – an expanding war in the Middle East, another potentially catastrophic hurricane – and not much going on in the world of steel prices. “Call me Stevie Wonder, I see nothing.” That’s how one service center executive described the current sheet market. There seems to be almost a competition among some of our Community Chat guests and contributors to outdo each other in flowery ways to say, “
Final Thoughts
Surprise, surprise. Forget Halloween, the trend this October is all around the unexpected. Known as the “October Surprise,” you never know what is in store for you in the month before a US presidential election. Still, if we pull back the dial back date-wise a little bit, a familiar theme has been added to the mix: kick the can.
Final Thoughts
Another day, another massive gap between the news and market sentiment. On the news side, we’ve got war in the Middle East. The devastation facing western North Carolina coming into tragic focus. And the outcome of the presidential election remains a coin toss, according to current polling.
Final thoughts
There are markets where the headlines and the prices are both crazy. This does not appear to be one of them, at least not yet.