Final Thoughts

Final Thoughts

Written by John Packard


On Friday, Steel Market Update sent data providers the final analysis for July of service center inventories, shipments, steel on-order, and percentage of inventories tied up for contract sales. Premium members will receive the report on Monday. As expected, after reviewing our Flash Report which is provided to data providers five days into the new month, inventories rose again at the end of July.

We have seen flat rolled inventories rise in each of the last three months (May, June and July) with July taking the largest jump.

We are also seeing a decline in the percentage of sheet inventories on order. This could be one of the first signs of some distributors reaching a balanced inventory situation. We will need to watch this closely when we analyze the August data.

If you would like to learn more about our proprietary Service Center Inventories and Shipment report, you can contact Paige@SteelMarketUpdate.com about subscribing to our Premium level newsletter. If you are a steel distributor and would like to be added as a confidential data provider, please reach out to Estelle.Tran@crugroup.com

One Week to Go…

There is now but one week to go before the doors open at the Georgia International Convention Center (GICC) in Atlanta for the 2021 SMU Steel Summit Conference. This year the conference will be unique as it will be a “hybrid” event. By this I mean we will have 900-950 executives joining us in Atlanta and approximately 100 others who will be at home or in their offices live-streaming the conference. We have reached our goal of 1,000 executives attending this year’s event, and we are looking forward to interesting speakers sparking a lively debate about where the industry is today and what the future will look like.

The rise of the Delta variant when we thought we would be mostly done with the COVID-19 pandemic has created new challenges for all of us. SMU/CRU are doing our part to ensure we provide the safest environment possible for those attending the conference in-person. We have expanded our footprint within the GICC, we are attempting to have the seating as socially distanced as possible, moving to Sli.do and away from hand-held microphones, putting monitors in the exhibition area, and allowing our in-person attendees access to the virtual platform so they too can live-stream should they be away from the main conference room. There will be fewer seats at the lunch tables, and we will all be wearing masks when not eating or drinking inside the convention center. We will also have a color-coded system identifying those who wish to social distance from those who are comfortable with hugs and high fives.

As I mentioned, our program is second to none (as always) and I want to recognize the speakers for the 2021 SMU Steel Summit Conference (in order of appearance):

Monday, Aug. 23

John Armstrong, Founder & CEO, Reibus International

Blake Patton, Managing Partner, Tech Square Ventures

Frank Williams, General Manager of E-Commerce, Marketing & Communications, Ryerson

Sean Kessler, Director, Metal Products, CME

Marc Gase, Director of Risk Management, Worthington Steel

Chris Shipp, Vice President of Supply Chain, Priefert

Jeremy Flack, Founder & CEO, Flack Global Metals

Caitlan Nelson, Principal, Crowe

Tony Barnes, Principal, Crowe

Arpana Brahmbhatt, Director of Industry Manufacturing at Microsoft

John Packard, President & CEO, Steel Market Update

Michael Cowden, Senior Editor, Steel Market Update

Michael Smerconish, Television and Radio Host, Author & Public Speaker, CNN, Sirius XM Radio

Josh Spoores, Principal Analyst – Steel, CRU

John Anton, Director, IHS Markit

Lourenco Goncalves, Chairman, President & CEO, Cleveland-Cliffs (with John Packard)

Tuesday, Aug. 24

John Packard, President & CEO, Steel Market Update

Ben Abrams, CEO, Consolidated Scrap

Ryan McKinley, Senior Analyst, CRU

Paul Lowrey, President, Steel Research Associates

Michael Cowden, Senior Editor, Steel Market Update

Leon Topalian, President & CEO, Nucor Steel (with John Packard)

Dr. Alan Beaulieu, Managing Director, ITR Economics

Lewis Leibowitz, Trade Attorney, Offices of Lewis E. Leibowitz

Kevin Dempsey, President & CEO, American Iron and Steel Institute

Michael Cowden, Senior Editor, Steel Market Update

NexGen Leadership Award, presented by Phil Bell, President, Steel Manufacturers Association (with John Packard)

Bernard Swiecki, Director-Research, Center for Automotive Research

Ken Simonson, Chief Economist, Associated General Contractors

Mark Millett, President & CEO, Steel Dynamics (with John Packard)

Wednesday, Aug. 25

John Packard, President & CEO, Steel Market Update

Barry Zekelman, Chairman & CEO, Zekelman Industries

Rick Marabito, CEO, Olympic Steel

Chris Shipp, Vice President Supply Chain, Priefert

Michael Cowden, Senior Editor, Steel Market Update

Cesar Jimenez, CEO, Ternium Mexico (with John Packard)

Andrew Lichter, Vice President, Corporate Strategy and Development, Mobius Risk Group

Phil Bell, President, Steel Manufacturers Association

Steven Montague, CEO, Midrex Technologies

Lynn Lupori, Head of Consulting, North America, CRU

John Catterall, Vice President, Electric Vehicle Program, American Iron and Steel Institute

Gregg Troian, President, PGT Trucking, Inc.

Jeffrey Short, Vice President, American Transportation Research Institute

Michael Cowden, Senior Editor, Steel Market Update

John Packard, President & CEO, Steel Market Update

Not counting SMU staff, we have 34 individual speakers discussing everything from steel prices to the economy. We are dealing with the decarbonization of the industry, electric vehicles, new supply, demand forecasts, economic forecasts, and steel pricing forecasts. Our virtual event registration is still open. You can learn more by clicking here.

I hate to even mention this, but the dates for the 2022 SMU Steel Summit Conference are Aug. 22-24.

I am also working on the 2022 Tampa Steel Conference which will be live in Tampa next year on Feb. 14-16.

Finally, we have two workshops coming up in October and November. In October, we will virtually host our next Steel 101: Introduction to Steel Making & Market Fundamentals Workshop. The Steel 101 dates are Oct. 5-6 (full day each). You can learn more about the Steel 101 workshop by clicking here.

On Nov. 2-3 (half day each) we will virtually host our next Introduction to Steel Hedging: Managing Price Risk Workshop. You can learn more about the Intro to Steel Hedging Workshop (used to be called Steel Hedging 101) by clicking here.

Also, please note that the instructors for both of these workshops will be in Atlanta at the SMU Steel Summit Conference next week.

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

Latest in Final Thoughts

Final thoughts

I’ve had discussions with some of you lately about where and when sheet prices might bottom. Some of you say that hot-rolled (HR) coil prices won’t fall below $800 per short ton (st). Others tell me that bigger buyers aren’t interested unless they can get something that starts with a six. Obviously a lot depends on whether we're talking 50 tons or 50,000 tons. I've even gotten some guff about how the drop in US prices is happening only because we’re talking about it happening.

Final thoughts

We’ve all heard a lot about mill “discipline” following a wave of consolidation over the last few years. That discipline is often evident when prices are rising, less so when they are falling. I remember hearing earlier this year that mills weren’t going to let hot-rolled (HR) coil prices fall below $1,000 per short ton (st). Then not below $900/st. Now, some of you tell me that HR prices in the mid/high-$800s are the “1-800 price” – widely available to regular spot buyers. So what comes next, and will mills “hold the line” in the $800s?