When I look at the results of our flat rolled survey, sometimes I have to scratch my head. In the survey we just completed last week, we asked at what point hot rolled prices would peak. Sixty-two percent of our respondents believe prices will peak at $700 or lower. To them I ask, what is happening in the market that is going to slow the rise?
I heard from multiple buyers late last week that HRC offers were $700 per ton or higher. My gut feel is we have some more to go before either more supply comes into the market, or demand starts to wane due to COVID-19, or for other reasons. Right now, inventories are low at the service centers (we expect our October analysis will find them still low but heading higher), automotive build continues, and residential construction is strong. The question marks are energy (expected to remain weak) and commercial construction (expected to slow as we move into 2021).
Our Price Momentum Indicator continues to point toward higher prices on flat rolled and plate over the next 30 days.
Watch foreign steel imports, as we anticipate they will rise in the coming months. One hundred percent of the trading company respondents to last week’s survey reported an increase in orders from North American buyers. They reported foreign offers as being more attractive against domestic steel. The only item the traders were not enthusiastic about was plate, where they reported plate prices as not being attractive to buyers right now.
The steel mill respondents to our survey pointed to two areas of potential weakness: energy and agriculture.
Our Steel 101: Introduction to Steel Making & Market Fundamentals Workshop attracts all kinds of companies. In the last workshop, we had service centers, business appraisers, steel mills and manufacturing companies. Reggie Garrett from Steel Dynamics told us, “Although the Steel 101 Workshop was virtual this year, the instructors still took ample time to answer questions and provide us with knowledge that will help us perform our everyday tasks in the steel industry!”
Our next Steel 101 workshop will be held virtually on Dec. 8-9. You don’t have to leave your home or office. Our instructors will be at your fingertips, and if you miss something you will have the opportunity to go back and review the instruction for a few weeks after the program has concluded. To learn more about the December program, costs to participate and how to register, please click here.
Only two days to go. My fingers are crossed that the election is definitive so we can go about our lives and our business without worrying about who the next president will be.
If you have not voted – Tuesday is the last day.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO
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