Final Thoughts

Final Thoughts

Written by John Packard


It has been a busy day trying to condense two days of data collection into one as we produce our flat rolled and plate indices for this evening. It should come as no surprise our numbers did track higher this week, and our Price Momentum Indicator continues to point toward higher prices over the next 30 days.

Capitulation is a word I heard today when speaking to a service center regarding the reaction of their end-user customers to the price of steel. “We are getting P.O.’s with no prices,” is what one executive told me. Right now, what is important is getting inventory and cost has in some respects (or to some companies) become irrelevant.

Our benchmark hot rolled average price topped $1,600 per ton, and it appears we are headed toward $1,700 based on conversations I had with steel buyers and a couple of mills. Will we go higher than that? Tell me what prevents the mills from going higher?

We did hear from service centers who reported some mills catching up on late orders (not all mills). Even so, there was not much spot available, and most contracts were still being held to tight maximums (some flexibility but not enough, said most buyers).

A manufacturing company in the South reported that two of their mill suppliers were shipping their June orders already (again, not all suppliers are shipping June orders right now). This same manufacturing company reported being offered $1,800 per ton spot hot rolled ($90.00/cwt), which they declined. The same mill then offered the tons at $1,700 per ton, which the manufacturer also rejected. This steel buyer told me, “Enough is enough!” How many steel buyers are reaching the same conclusion?

We will continue to work with the steel buying community to better understand what offers are being made out there and how steel buyers are reacting to the new pricing. Stay tuned.

Good News…Live and In Person!

The number of new COVID cases in the United States, Mexico and Canada have been steadily declining and are well below their peak. In the United States, we are at levels not seen since March 2020 and the expectation is for the cases to drop as the vaccination rate continues to increase.

This week, Michael Cowden of Steel Market Update will be speaking in person to the National Association of Steel Pipe Distributors (NASPD) in Denver. Association meetings and conferences are going back to hosting live events around the country.

Even Las Vegas was in the news today as they have dropped social distancing in the casinos.

John Packard Summit 18For months, I have been optimistically touting that the 2021 SMU Steel Summit Conference would be a live event at the Georgia International Convention Center in Atlanta on Aug. 23-25 (74 days to go). As I speak to you today, I want you to know all systems are a great big “GO” for a live conference, and we are looking forward to the opportunity to see as many of you in person as possible this year. The conference program and our speakers will be great. After being away from live events for more than a year, the networking for this year’s event will be exceptional. We have a large group of sponsors and exhibitors who are supporting the conference and looking forward to interacting with our attendees.

As of this morning we were closing in on 500+ executives already registered for the 2021 SMU Steel Summit Conference. You can view the companies registered to date by clicking here (we will update the site with an * to identify those companies sending more than one executive soon). We anticipate that somewhere around 800+ attendees will show up in person at the GICC for this year’s event. That number could exceed 1,000 executives, as we know many of you have not yet made a final decision to travel, or you work for organizations that have not yet given the green light for in-person interactions outside the company. I expect that will change in the coming weeks as the COVID numbers continue to drop and our attendance continues to rise. If you would like to register, you can do so by clicking here.

2021 Conference “Hybrid” Event – Best of Both Worlds

This year’s conference will be a “hybrid” event. What that means is we will provide an option for those who cannot attend in person to live-stream the event through our platform. The cost to attend “virtually” will be the same as the cost to attend in person. If you register for one and you want to switch to the other, you will be able to do so (Example: if you register for virtual and later find you are able to travel, you will be allowed to switch to the live event). We will have more details about the virtual option and how to register for virtual participation by early next week.

Our virtual platform will also be available to those attending the conference live. What does that do for you? For one, it will take the place of the SMU Events App we have used in the past. The platform will have the agenda, speakers’ biographies, and speaker presentations. All of the attendees will be listed, so you will be able to interact with attendees who are either at the event in Atlanta or who are attending virtually. You also will be able to either live stream a presentation from outside the convention center (if you are in a meeting somewhere) or you will be able to view a presentation “on-demand” as it will be recorded and available for playback.

I am working on filling the final program “holes” and tweaking the agenda to make sure we are touching on the topics of most interest to the greater steel community. I am hopeful to have the full program completed within the next two weeks. However, most of the agenda is done, and you can view who we have speaking and the current draft of the agenda by clicking here.

The hotels close to the convention center are filling up. The Atlanta Airport Renaissance Gateway Hotel and the Atlanta Airport Marriott Gateway Hotel are both sold out. There are two other Marriott properties in the Gateway complex, the SpringHill Suites at Atlanta Airport Gateway, and the AC Hotel at Atlanta Airport Gateway. I have linked to both of their websites if you would like to make a reservation. Please note, we do not have a room block this year.

To learn more about this year’s conference including nomination criteria for the SMU NexGen Leadership Award please click here.  To register to attend the event in person, please click here.

If you would like to speak to someone about getting registered, you can send an email to conferences@crugroup.com or to me personally John@SteelMarketUpdate.com and we will make sure you are taken care of. If you have questions about pricing, discounts for large groups of attendees, etc., please use those same email addresses.

In our last SMU newsletter, I mentioned the wrong date for Timna Tanners’ SMU Community Chat Webinar. The correct date is Wednesday, June 9, at 11 a.m. ET. This webinar is free to the public and you can register by clicking here.

If you have questions about renewing, adding people to an existing account, creating a new account or upgrading to Premium from Executive, please contact Paige Mayhair who can be reached at Paige@SteelMarketUpdate.com or by phone 724-720-1012.

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

John Packard, President & CEO, John@SteelMarketUpdate.com

Latest in Final Thoughts

Final thoughts

Last week was a newsy one for the US sheet market. Nucor’s announcement that it would publish a weekly HR spot price was the talk of the town – whether that was in chatter among colleagues, at the Boy Scouts of America Metals Industry dinner, or in SMU’s latest market survey. Some think that it could Nucor's spot HR price could bring stability to notoriously volatile US sheet prices, according to SMU's latest steel market survey. Others think it’s too early to gauge its impact. And still others said they were leery of any attempt by producers to control prices.