Final Thoughts

Final Thoughts

Written by John Packard


Flat rolled steel prices have been rising consistently for 45 straight weeks (since the week of Aug. 10, 2020). There is a chance (no guarantees) that we could see the cycle continue for a full 52+ weeks as the steel mills continue to have supply issues and demand remains quite strong in just about every market segment. The only weak link is energy, and with oil exceeding $70/barrel this too may soon change. SMU’s Price Momentum Indicator is still pointing toward higher flat rolled and plate steel prices.

For those who are struggling to buy steel, it’s just another week with the same old story – limited supply and higher prices.

During this week’s analysis of the flat rolled and plate steel markets, we heard from steel buyers who reported some mills getting better at deliveries (still late but not so late). And buyers are not interested in building unsold inventories due to the record high prices.

The Federal Reserve is now projecting real gross domestic product (GDP) growth for 2021 to come in at 7%, up from 6.5% forecast in the March report. Why is this important? A rule of thumb is anytime GDP reaches or exceeds 2.5%, you will see growth for steel products. Seven percent is almost three times what is needed for growth in steel demand. The Fed went on to project that real GDP will be up 3.3% in 2022, which if correct means another growth year for the steel industry.

Steel Summit2021 SMU Steel Summit Conference Update

I will be publishing a new revised agenda with additional speakers in Sunday evening’s issue of our newsletter. I intentionally hold space open so that we can have the most cutting-edge and relevant program by the time we reach Aug. 23.  

Bookings for the SMU Steel Summit Conference were quite strong this week with the following companies adding their names to the growing list of companies that will be represented in Atlanta on Aug. 23-25 (those with an * next to their name will be sending more than one person): AA Metals, Acuity Brands Lighting, AGCO, American Alloy Steel*, Atlantic Logistics LLC, Carlisle Construction Materials, Central Plains Steel Co.*, Central Steel & Wire*, Commercial Metal Forming, Crown Equipment*, Headwall Partners, High Steel Service Center*, Jemison Metals, JN Linrose Manufacturing, John Deere*, M Bar C Construction, Niagara LaSalle Steel, Reliance Metalcenter, Reliance Steel & Aluminum Co.*, Universal Steel*, U.S. Steel, Vicwest Building Products, and Wallner Expac, Inc.* The following companies added more people: Alliance Steel*, Mill Steel Company*, Nucor*, O’Neal Steel, Inc.*, and Steel Dynamics*. If you wish to view a more complete list of attending companies, click here.  If you would like to register for the 2021 SMU Steel Summit Conference in Atlanta and attend live or through our virtual platform, please click here.

If we continue registrations at this week’s booking rate, we will exceed 800 attendees and could go as high as 1,000. Come join us either in person or virtually

Hotels for SMU Steel Summit Conference

The hotels at the Gateway Center (where the GICC is located) are beginning to fill up. My understanding is the Renaissance, SpringHill Suites and the Marriott Gateway are sold out. However, when I checked the websites for each hotel, the Atlanta Airport Marriott Gateway had a rate showing of $332/night for Aug. 22-25. This may just be a few rooms that were cancelled or released back into inventory, so I expect there to only be a few openings before they go back to being sold out.

The other hotel in the Gateway complex is the AC Hotel Atlanta Airport Gateway (brand new hotel). As of this afternoon they had rooms and the rate on their website was $298/night. Two other choices that are about one mile from the convention center are the Atlanta Airport Marriott which has a room rate of $168/night and the Westin Atlanta Airport which had a rate of $156/night on their website today.

SMU NexGen Leadership Award

We are receiving nominations for the 2021 SMU NexGen Leadership Award. The NexGen Leadership Award is awarded to someone 35 years or younger who exhibits strong leadership/communication/innovation skills. You can reward those within your organization whom you think will be future leaders and examples for others to look up to by nominating them for this recognition. You can find out more about past award winners and how to nominate someone in the best light by clicking here. All nominees will be invited to a special reception on the first evening of the SMU Steel Summit Conference. The top three finalists will be given free admission to this year’s conference. In the past we have offered all nominees half price admission to the conference. I will check to make sure that is the case again this year and will advise.

The SMU NexGen Leadership Award winner will receive:

  • A mentorship day with Barbara Smith, CEO of Commercial Metals Company
  • Recognition at the SMU Steel Summit Conference, SMU newsletter and website
  • Invitation to attend one of the SMU steel training workshops (Steel 101, Hedging 101, Hedging 201, etc.).
  • Invitation to attend the 2021 SMU Steel Summit Conference at no cost.
  • Invitation to attend the 2022 SMU Steel Summit Conference at no cost.
  • Recognition in the form of a trophy or plaque that can be proudly displayed in their work area.
  • A video of the award presentation by Phil Bell, president of the Steel Manufacturers Association, which is the sponsor of the award.

Nominations for the NexGen Leadership Award will close on July 16, 2021. The three finalists will be notified on Aug. 9 so they can make their plans to attend this year’s conference. You can click here to learn more about the award and nomination process or go to: https://www.events.crugroup.com/smusteelsummit/awards

Our next Steel 101: Introduction to Steel Making & Market Fundamentals Workshop will be held on July 20-21. The class is quickly filling up. For more information, please click here or go to: https://events.crugroup.com/steel101/about-steel-101

SMU will host Charles Schmitt, president of SSAB Americas, at our next Community Chat webinar beginning at 11 a.m. ET on Wednesday, June 23. Schmitt will talk plate, decarbonization and sustainable steelmaking. The 45-minute webinar is free and open to all who register. For information and to register, click here.

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.