Final Thoughts

Final Thoughts

Written by John Packard

Memorize these words, “carbon border adjustment tax,” as they are being mentioned in the Senate Budget Committee, which is working on the $3.5 trillion reconciliation package the Senate advanced on Wednesday. The idea proposed would “account for the cost incurred by U.S. businesses to comply with laws and regulations limiting greenhouse gas emissions,” based on a fact sheet issued by Senator Coon’s office.

According to World Trade Online, “Coons’ bill runs parallel to the European carbon tax proposal. European officials have said they aim to have a carbon border adjustment in place by 2023.”

Decarbonization, carbon border adjustments, carbon offsets, ESG, Scope 1, 2, and 3 will all be discussed at this year’s SMU Steel Summit Conference. For the first time, you can participate and enjoy the conference from the comfort of your home, office or live and in-person in Atlanta (hybrid event). You will be able to live stream the speakers, network with those online or who are at the GICC, participate in live Q&A and polling, or watch the segments you wish to view on an on-demand basis. You can learn more about our program, speakers, attending companies, costs to attend (virtual or in person), and how to register by clicking here.

coils2Those responding to our request for market information this week were mostly united in their belief that the pace of steel price increases had moderated, but weren’t necessarily over. I used the word “mostly” on purpose as there were comments made which indicated a belief that prices have plateaued, and we had one large end-user who advised they were getting quoted lower hot rolled pricing.

One service center steel buyer told me, “Pricing has plateaued…Lead times [on hot rolled] are in mid-September to early October. This puts lead times at 4-7 weeks, not 10.” This buyer went on to say, “The steel mills are resolute that we are headed to $2,000 hot rolled. I’ve not bought into that. [I am] waiting for more evidence on [service center] inventory build.”

Another service center executive, when asked if the market was changing, opined, “Not sure how long this march upwards is going to last, if automotive doesn’t start picking up, but I think the mills are banking on upcoming outages to offer stability.  With capacity utilization high, mills catching up, input costs relatively stable, and more spot opportunities out there, I believe we’re going to see soon if we have true demand or if companies are over-forecasting just so they can stay in supply.”

A third service center, when asked if they were seeing any increase in spot or contract tons from their mill suppliers, told us, “Increase in spot availability from integraded mills. No increase in contract tonnage availability.”

“I still believe there are a lot of duplicate tons placed for insurance. This will surface as soon as prices falter – and falter they will. Between steel prices, credit demand and cost of goods, this has to end,” is what we heard from another data provider. “I am seeing more tons available from every mill, again no large tons, but each month there seem to be 15-20% more available than last month.”

An automotive-related service center provided these insights: “Contract tons are less restricted. The fact that I have been given any spot offers at all is an improvement. End users/customers are now starting to balk at prices, whereas they had been willing to pay any price as long as you could provide the steel.”

A manufacturing company in the Southwest provided these thoughts when asked if the market was changing: “No I do not think so. Demand is still strong across all sectors. Price increases are smaller but still moving higher.”

A service center located in the middle of the country also provided some thoughts on possible changes in the market: “Yes, in the sense that the mills are more current, and inventories are generally higher vs. record low levels, but still below longer-term averages. The other issue is the widening gap between the US sheet prices vs. everywhere else. Asia and the EU appear to have peaked and are seeing some slight corrections/stability where the U.S. continues to climb. It feels like the U.S. is getting close to peaking soon as well, but we’re not expecting any dramatic drop when it does.”

A large manufacturing company told us they had HRC prices out of Mexico that were $250 per ton lower than the domestic prices delivered into their facility. They went on to say they were seeing changes in the market. “For the first time in many months we are able to secure more tons than needed. Steel prices outside of the U.S. are mostly heading lower. I don’t see China reducing steel output by 58 million metric tons in 2H in order to meet the goal of not exceeding 2020 total steel output. Lastly, the Delta variant is becoming a bigger concern. More and more businesses are requiring masks again.” 

“We see more of the same – the status quo is chaos,” said a West Coast service center. “We continue to see a slight slowdown in orders, and our component problems have reached the point of shutting down production vs. just slowing it down. We’re experiencing containers stuck at port for extra weeks, trucks unavailable to be put under the containers once they’re released, vendors continually pushing out orders – the supply chain is still all sorts of tangled up. Specific to steel, we have not reached our forecasted consumption across the board this year, yet we are back to having some intermittent short-term delays for specific sizes.”

Steel SummitTen Days to Go…

There is one panel left for me to speak with (which I will do tomorrow morning) regarding the content of their segment of the program for this year’s SMU Steel Summit Conference. Otherwise, I have spoken to every single one of our speakers from Michael Smerconish to Lourenco Goncalves and everyone in between.

We have a fantastic program, which we think you will enjoy whether in person or watching from the comfort of your office/home. If you would like to learn more, click here.

SMU events are recognized as the leaders in the steel industry. We work on producing a quality product with new wrinkles that allow for more people to attend. We also work on new ways people can network with one another. We have transitioned our platform from the 2020 SMU Steel Summit Conference and have re-purposed it to be able to live stream our in-person event. The platform will take the place of our App as we feel it offers more benefits to those who are at the live event, as well as those who are attending virtually.

On Wednesday, we conducted a webinar that went over how to use the platform effectively. We will have that video available sometime tomorrow (Friday, Aug. 13) in the SMU Community Chat Webinar section of our website.

We also discussed the protocols that will be in place at the Georgia International Convention Center. There is a mask mandate inside the GICC. The mask rule is outside of our control as it is required by the GICC.

If registered for the event, you have already gotten information regarding the protocols, and you will receive more information prior to getting to the venue.

If you are uncomfortable attending a live event due to the Delta variant of COVID, you can move your registration to virtual. If you have questions or would like to make a change, please contact

If you would like to know when we will conduct our next steel conference, it will be Feb. 14-16, 2022, in Tampa, Fla. The Tampa Steel Conference is slated to be a live conference next year. We have expanded the conference to a two-day event. There will be an opening cocktail party on Monday evening. On Tuesday, there will be a golf outing for those who wish to play. There will be a tour of the port for those who wish to stay behind or are not golf fans. On Tuesday afternoon, we will have three Pre-Conference events 1) Addressing Supply Chain Issues, 2) Changes in How Steel is Bought and Sold, and 3) Workforce Challenges. On Tuesday evening, there will be a large cocktail party/networking event. On Wednesday, we will have a full-day program, which will begin around 8 a.m. and conclude at 3 p.m. ET. Mark Feb. 14-16, 2022, on your calendars now.

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

John Packard, President & CEO,

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.