Final Thoughts

Final Thoughts

Written by John Packard

“It’s not how much it cost, it’s do I have steel to make my parts…?”

That was one of the comments discussed this morning during our HARDI galvanized steel conference call. Some of the mechanical contractors have jobs to complete, and they need steel to finish. However, others are trying to hold back on buying steel until they absolutely must have it in the hope that prices will move lower in the weeks and months ahead.

Well, not everyone feels price is secondary to having inventory. Price does matter, and one of the questions I got this morning was, “Is there a level where the mills are content, and prices will not go any higher?”

John Packard Summit 18I don’t have a quick answer to that question. Perhaps it is one that should be presented to Nucor CEO Leon Topalian during our one-on-one fireside chat on Feb. 2 at the Tampa Steel Conference. I have made a note to do just that.

Speaking of the Tampa Steel Conference here are some of the additional companies that have registered to attend the Feb. 2 virtual event so far this week (those with an * means more than one person from the company is attending): B. Riley Financial, Borroughs, Bull Moose Tube Company, Doosan Bobcat*, Duluth Seaway Port Authority, Duro-Last Inc.*, Hercules Industries Inc., National Material Company, North Shore Steel, Ports of Indiana*, POSCO America, Ryder, Steel Dynamics Columbus, Steelscape*, Verde Industries Inc., and Worthington Armstrong Venture (WAVE). We have moved past 300 registrations on our way to 400. If you would like to add your company name to the list of those attending, you can click here to register. If you would like to learn more about the conference (agenda, speaker bio’s, costs, etc.) please click here.

The price ranges we are collecting on spot hot rolled, cold rolled, galvanized, Galvalume and plate are quite wide right now. We are in interesting times as some mills have not yet opened their order books, others are restricting tons (one end user told me today that his 3,000 ton a month spot commitment with his mill suppliers has been sliced to only 700 tons) and still others are taking spot business but quoting very high prices. We are aware of hot rolled offers above $1,300 per ton.

SMU spoke to a number of traders today to get a sense of the import prices and activity. We understand that South Korean and Turkish base hot rolled offers are running in the $1,000-$1,040 per ton range. The Korean material was May arrival and Turkish was late April.

One Turkish trader told me he believes the number they need to be at is $960 per ton with a March shipment. Scrap prices are weakening in Turkey, so they are seeing if this can be accomplished.

I also learned that Chinese steel prices have been dropping. A trader told me they booked wire rod last week from China and that same product is now $45 per ton cheaper this week.

There are also rumors that AHMSA (Mexico) is considering sending hot rolled into the U.S. again after being out of the market due to financial and ownership issues.

The expectation is there will be foreign hot rolled coming soon at numbers under $1,000 per ton. Depending on the tonnage available, this could start to put a top to the domestic hot rolled market – at least in the areas close to ports or to Mexico.

I did speak with a couple of large trading companies that reported very few sales as numbers are not working right now.

We are looking at the prospect of building a new index that measures the resale spot market. I have thought about doing this in the past. The issue has always been there are so many dissimilar products, we would have to spend hours and hours adjusting for the extras on each product to get it back to a base unit that can be compared. The easiest product would be hot rolled coil, and we are thinking about how much value that would have to our readers. If you have an opinion, please send me an email:

For those of you who may have an interest in attending or sending one or more of your employees to one of our Steel 101: Introduction to Steel Making & Market Fundamentals Workshops, we have testimonials from some of our recent attendees. You can find their comments by clicking here. An example is from Chris Burkepile, Quality Engineer, Kloeckner Metals, “I thought the class was amazing and very helpful for someone like me who was new to the market. I appreciated the time each instructor took to ensure every question was answered. I’d love to go to another one next year even if it comes out of my own pocket. A+” Our next workshop is Feb. 9-10; you can learn more and register by clicking here.

As always, your business is truly appreciated by all of us here at Steel Market Update.

John Packard, President & CEO,

Latest in Final Thoughts