Steel Products

Steel Buyers Trying to Put Square Peg in Round Hole?

Written by John Packard

Square Peg in a Round Hole?

As we move about speaking to steel buyers, I get the impression they want to live by the rules of the market that have been in place for most of the last 30+ years. Flat rolled and plate steel buyers believe world steel prices will ultimately impact U.S. steel prices. In the past, the landed cost of foreign steel placed a floor on domestic steel prices. Why buy domestic at “X” price if you can buy foreign at “X” minus $60+ per ton (sometimes as much as $200 per ton)?

John Packard Summit 18Back a few years, the domestic steel mills did not produce all the products needed here, and 26-29% of apparent steel supply (2014-2017) from foreign took up the slack to keep a lid on prices. Fast forward to today and the average is almost 10 percentage points lower (19%), which is one of the reasons why supply is constrained and the pressure on the domestic mills to slow price increases is essentially non-existent.

Demand is strong. U.S. GDP is forecast to be around 6.6% for the year, according to The Conference Board. Steel demand grows when GDP hits 2.5%. We are well beyond 2.5%.

People keep trying to compare 2021 to previous years of which there are no comparables. In other words, they are trying to put square pegs in a round hole. Guess what? It does not fit.

The SMU Price Momentum Indicator is pointing toward higher prices over the next 30 days. The indicator is there not because it makes logical sense (does $1,800 per ton hot rolled make logical sense). It is pointing toward higher prices until someone or something happens to push it in the opposite direction.

SMU Steel Summit Conferences Update

Steel SummitWe are now under seven weeks remaining before the start of the 2021 SMU Steel Summit Conference in Atlanta. The journey has been fraught with obstacles as we have dealt with COVID-related issues both here and around the world. A portion of the CRU events team will be traveling to the United States as will the SMU team and many of the CRU teammates from around the United States. They will be joining what looks to be a large conference of more than 900 executives from the manufacturing, distribution, steel mills, trading companies, toll processors, logistics companies and many others who support the industry.

Even though we have had a long holiday weekend and this is the first day back, registrations continued to come in for the SMU Steel Summit Conference. Here are the following companies who registered executives for this year’s event (those with an * mean they registered more than one person): Alliance Metal Products, Graber Post Buildings, Inc., Interlake Mecalux, Inc.*, Jenmar, JM Steel, Ludlow Mfg. Inc., Ohio Coatings Company*, PLS Logistics, Sherwin-Williams, Stelco*, Triad Metals International, TSA Processing, and Wheeling-Nippon Steel Inc.*. The following companies added more executives to their list: Bailey Metal Processing*, NIM Group*, Precoat Metals*, and Steel Dynamics*.

If you would like to join the approximately 900+ steel and manufacturing executives who will be attending the event in person (or the executives who will be attending virtually), you can register by clicking here. To learn more about the event agenda, speakers, NexGen Leadership Award nomination process (nomination due by July 16), list of attending companies, costs to attend (in-person or virtual), etc., please go to this website:

The Gateway area hotels are either sold out (or very close). I would recommend you go on the Marriott website and look at each one of the hotels to see if they have rooms available for the dates you will be attending the conference. We are recommending coming in on Sunday evening (Aug. 22) and leaving on Wednesday afternoon (Aug. 25) as our Pre-Summit program begins at 9 a.m. ET on Monday morning. The full conference opening will be at 1 p.m. ET on Monday (Aug. 23).

The hotels you should check are: Atlanta Airport Marriott Gateway, Renaissance Atlanta Airport Gateway Hotel, SpringHill Suites by Marriott Atlanta Airport Gateway Hotel, AC Hotel by Marriott Atlanta Airport Gateway – all of these hotels are located within easy walking distance of the Georgia International Convention Center where our conference will be held. There are two hotels about two miles away from the venue: Atlanta Airport Marriott Hotel and The Westin Atlanta Airport Hotel – both of these hotels are located on Best Road and should be good options. Note: we do NOT have a shuttle running between the Atlanta Airport Marriott or Westin to the convention center. You will need to Uber/Lyft over or use a rental car.

You can learn more about the conference (agenda, speakers, attendees, NexGen Leadership Award, costs to attend, and how to register) by going to this website:

SMU Steel Training Workshops

We have two workshops on the horizon: Steel 101 and Steel Hedging 201.

Our well-known and well-attended Steel 101: Introduction to Steel Making & Market Fundamentals Workshop will be held virtually on July 20 and 21. Our Steel 101 workshop covers the steelmaking, rolling, qualities, how steel is bought and sold, and the issues affecting steel prices. Our instructors–Mario Briccetti, Roger Walburn and Chuck McDaniels–are experienced steel professionals (two are metallurgists) and instructors. You can learn more about the agenda, our instructor biographies, costs to attend and how to register by clicking here.

The second workshop coming up on our calendar is our still new (well-received and well-attended) Steel Hedging 201: Advanced Strategies & Execution Workshop. This workshop will be held virtually on Aug. 3-4 with Spencer Johnson of StoneX and guest instructors. This workshop is for those who have some experience with hedging price risk (either from our Steel Hedging 101 course or from industry experience) and desire a deeper dive into the strategies behind hedging and how to manage the risks associated with your company’s business. You can learn more about the agenda (which is two half days), instructors, costs to attend and how to register by clicking here.

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

John Packard, President & CEO,

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