Final Thoughts
Final Thoughts
Written by John Packard
May 20, 2021
Ah, remember the good old days…
In this month’s galvanized steel conference call with HARDI wholesalers, one of the manufacturing companies discussed the frustrations of buying foreign steel, issues with late deliveries and then difficulties moving the steel from the port to his manufacturing facilities. Traders expressed frustrations related to freight issues (ship and truck). However, supply was for the most part not an issue.
I spoke with a couple of trading companies over the last two days to see what availability looks like. The response was, “You can get steel if you are willing to pay ungodly amounts of money.”
Offers for a product like .012” X 41” X Coil galvanized G30 for a furnace pipe application are in the high $90s/cwt. To put that into perspective, when I was selling steel the largest manufacturer of furnace pipe told me he stops buying at $50.00/cwt. Remember the good old days when you had a choice to stop buying when prices got too high?
One trader told me they had recently sold bare Galvalume for $122.00/cwt… That’s $2,440 per ton!
I spoke with a manufacturing company CEO today who buys light-gauge material from both domestic and foreign sources. He just placed November production (foreign) for December/January arrival. On the domestic side, contract tons were still being restricted (and the orders are still coming in late). How do you manage your business with seven-to-eight-month lead times?
A service center CEO told me this afternoon they have begun to turn down spot tons because a couple of the mills have gotten well ahead of the market. For example, we have heard of $1,800 per ton hot rolled coil offers out there when most of the market is closer to $1,600 per ton. Having spot tons turned down for price may be one of the first signs there is a ceiling.
The big sign of a pending change will come from manufacturing companies and their inventories. When they start pushing out orders to the service centers and then the steel mills….
In the steel survey we conducted this week, steel buyers seem resigned to benchmark hot rolled prices hitting $1,700 per ton. Again, the highest number we recorded in the past was $1,070 per ton in summer 2008.
One of the traders I spoke with told me they did not think they would ever see $21.00/cwt or $420 per ton hot rolled (which is what they paid last August domestically). They went on to say that the market has changed so much with the consolidation of AK Steel/AMUSA and Big River Steel into USS that they may never see $31.00/cwt ($620 per ton) prices in the future.
The 2021 SMU Steel Summit Conference registrations are beginning to take off as we close in on 450 executives already registered for this year’s in person event. I recommend coming in early, either on Sunday evening, Aug. 22, or early Monday morning as our Pre-Summit programs begin at 9 a.m. ET, and the official open of the conference will be at 1 p.m. ET on Monday. The conference will conclude around 3 p.m. ET on Wednesday, Aug. 25. The conference will be held at the Georgia International Convention Center (www.gicc.com) and a good time will be had by all.
Over the past few days, we have had the following companies register (those with an * means more than one person is coming from that company): American Construction Metals, Anchor Bay Steel*, Chapel Steel, Fayette Pipe Company, Goldman Sachs*, Hubbell, Jensen Bridge & Supply Co.*, JFE Shoji America, LLC*, Kloeckner Metals, Medtrade, Inc.*, NB Handy*, and Steel Warehouse*. We are approaching 200 companies being registered.
One of the hotels next to the GICC is reporting they are sold out (Renaissance). The other three still have rooms (Atlanta Airport Marriott Gateway, Atlanta Airport SpringHill Suites Gateway and AC Hotel Gateway). We are not offering a room block this year, so you can contact Marriott directly to book any of these hotels on your own.
The cost for this year’s conference is $1,395 per person with discounts of $100 per person each for SMU/CRU member companies and an additional $100 discount for companies sending more than one person. You can learn more about our agenda, speakers, NexGen Leadership Award nomination process, attending companies, costs and how to register by clicking here. You can go directly to registration by clicking here. If you have any questions, please contact conferences@crugroup.com
Steel Manufacturers Association (SMA) President Philip K. Bell will be the featured speaker for the next SMU Community Chat webinar on Wednesday, May 26, at 11 a.m. ET. Join us for this 45-minute webinar, which is free and open to all. Click here to register.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO, John@SteelMarketUpdate.com
John Packard
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