Final Thoughts
Final Thoughts
Written by John Packard
August 9, 2021
The U.S. Senate passed the $1 trillion infrastructure bill. The bill includes $550 billion in new spending. The bill calls for $110 billion for roads, bridges and major infrastructure projects. It also includes $40 billion for bridge repair and replacement, $39 billion to modernize public transit, $66 billion for passenger and freight rail, $65 billion to improve broadband infrastructure, $17 billion for ports and $25 billion for airports.
The bill also includes $7.5 billion for electric vehicle chargers and $7.5 billion for zero and low emission buses and ferries. Also included is $65 billion to rebuild the electric grid, $55 billion to replace lead pipes in the water systems, with another $50 billion to protect the systems from drought, floods and cyber-attacks. There is also $21 billion to clean up Superfund and brownfield sites, reclaim abandoned mine land and cap orphaned gas wells.
The bill is not yet law as it needs to be passed by the U.S. House of Representatives.
It is expected to become law, and if so it would be the first major infrastructure bill of this size since the 1960s. The bill would mean a great deal for the steel industry as many of the projects will need steel plate, long products (rebar/beams), and sheet steel (EV charging stations, airports).
To be or not to be, that is the question…
Are we seeing signs of a top or is it a bit premature? That is the real question being asked by those involved with the steel industry.
Steel prices were flat to up again this week as benchmark hot rolled coil reached a new milestone at $1,900 per ton ($95.00/cwt).
Spot availability is still constrained for most of the data responders reporting to us this week. Most continue to be on allocation or on strict controls when it comes to contract tons.
Based on a conversation I had with a large hot rolled service center buyer, lead times out of most of the HRC mills are in late September/early October (4-7 weeks). This would be an improvement from the 10 weeks we have been collecting through our surveys (next survey is next week).
Keys we are watching carefully: Service center inventories, mill lead times, changes in demand, changes in supply, foreign steel imports, and the spread between foreign and domestic steel prices.
All of these items will be discussed during the SMU Steel Summit Conference on Aug. 23-25.
For anyone who plans on attending the 2021 SMU Steel Summit Conference, I highly recommend you attend tomorrow’s (Wednesday, Aug. 11) SMU Community Chat Webinar. The webinar will briefly cover our program. The bulk of the program will cover the Steel Summit Conference platform and how to use it effectively, as well as the safety protocols that will be in place at the event. We will answer your questions as to what we are doing to help reduce (we cannot eliminate) the COVID risk for those attending the conference in person. You can register for this free webinar by clicking here.
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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Final thoughts
SMU has heard from some larger buyers who have stepped back into the market to buy at prices that, if not at a bottom, they assess to be close to one. Is it enough to stretch out lead times and send prices upward again? Or do we continue to scrape along the mid-$600s per short ton (st) as we have been doing for most of the last month?
Final thoughts
Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves had some insightful things to say today about the steel market and about a conference we suspect might be Steel Summit.
Final thoughts
They say a picture is worth a thousand words. Well, when you add in some commentary from respected peers in the steel industry to those pictures, that may shoot you up to five thousand words, at least. In that spirit, we’ve added some snapshots from our market survey this week, along with some comments from market participants.
Final thoughts
I thought we’d have more clarity this week on Section 232, Mexico, and a potential carve-out for steel melted and poured in Brazil. As of right now, the only official comment I have is from the Office of the United States Trade Representative (USTR).
Final thoughts
There are just 40 days left until the 2024 SMU Steel Summit gets underway on Aug. 26 at the Georgia International Convention Center (GICC) in Atlanta. And I’m pleased to announce that it's official now: More than 1,000 people have registered to at attend! Another big development: The desktop version of the networking app for the event has officially launched!