Final Thoughts

Final Thoughts

Written by John Packard

Welcome back to those who took an extra day or two off after the New Year. This is my first article of the year as Michael and Tim continue to absorb more of my workload.

For those of you who did not view or listen in on the SMU Community Chat we hosted yesterday with Timna Tanners of Wolfe Research (she used to be with Bank of America), you missed an interesting webinar. You can find it on our website under the SMU Community Chat tab or by clicking here. Timna will be one of our speakers at this year’s Tampa Steel Conference. She will be on an interesting two-person panel with Todd Leebow, CEO of Majestic Steel.

John Packard Summit 18I spoke with the head of a medium-sized Midwest service center this morning. He had two comments that stuck with me: 1) They did not need to buy any steel because their inventories are flush, and 2) they are desperately looking for workers. These two issues, high inventories and a lack of employees, are going to be two of the main topics associated with the first half of 2022.

The issue of high inventories is pushing steel prices lower. How low they will go, and what the “new normal” will look like, is the third topic of importance for 2022.

Demand looks good. In fact, demand may be better during 2022 than it was in 2021. As Timna pointed out yesterday during our webinar, automotive is forecast to be higher by about 15%, construction is still strong, and the energy markets are coming back with oil prices at nearly $80/barrel. Demand is something that is important at every point during the year.

Ah, then there is the issue of supply. This is something Timna spoke about as there are approximately six million tons of supply coming on during 2022 at the U.S. mills. She also mentioned the new supply coming out of Mexico (with some of that supply being pointed at the U.S.). It is not just Mexico; we are seeing expansion of supply and shipments out of the Canadian mills to the U.S. as well. We will be watching supply closely as SDI Sinton, North Star BlueScope, Nucor and other tons come online.

Plus, we must keep an eye on trade. Will foreign steel imports shrink in the coming months as U.S. prices begin to slip and the need for buyers to increase steel purchases wanes. I was speaking with one steel mill executive today who feels imports will peak in March and the shift to a bigger percentage being bought domestically will begin. Trade will be interesting to watch as the U.S. moves away from tariffs to more quotas with our trading partners. Another interesting trade topic will be the U.S. beginning to replace “dirty” steel with “clean” steel. Will some of the bigger polluting countries see their participation in the U.S. markets cut back, and how will U.S. end-users handle the issue?

There will be plenty to watch over the course of this year. SMU will be focused on bringing you the most complete information through our newsletters, webinars and our two conferences: Tampa Steel Conference and SMU Steel Summit Conference.

Steel Market Update has learned through industry sources that the Steel Dynamics plant in Sinton, Texas, has now run a couple of heats (through EAF) and have run a few coils through their hot strip mill. The rumor is production is not expected to start until February or March 2022.

Tampa.Steel.ConferenceOn Tuesday, we published the final agenda for the 2022 Tampa Steel Conference, which will be held in Tampa, Fla., in February. The networking begins on Feb. 14 and continues the morning of Feb. 15. The actual conference begins on Tuesday, Feb. 15, at 1 p.m. ET and concludes on Wednesday, Feb. 16, at 3:30 p.m. ET. The agenda can be found by clicking here or by going to

The Tampa Steel Conference is different from the SMU Steel Summit Conference in several ways. The TSC has expanded networking opportunities. On Monday there is a free boat tour of the port. Normally there are approximately 50 people on each tour. This gives you a rare opportunity to view the port from the water. You will learn more about the port facilities. You will also get to see firsthand just how congested the port facilities are. Plus, you will get to interact with others on the tour. We will have a low-key networking cocktail reception for those who arrive early. The cocktail reception will be located on the ground floor of the Marriott Water Street Hotel in an area where we will have both inside and outside access for those who want to be outside and close to the water.

On Tuesday morning, the TSC will host a golf outing at The Eagles Golf Club ($150 fee includes golf and lunch). You can find details about the golf outing on the TSC website. There will also be another opportunity to tour the port by boat.

For those of you who looking for training on steel price hedging, we are offering one of our Introduction to Steel Hedging Workshops in conjunction with the Tampa Steel Conference (extra fees required). This provides a perfect opportunity to get personal training while being able to attend the full conference. Or, if you are not interested in attending the conference, you still have an opportunity to attend a live, in-person hedging workshop. You can find more information about the agenda, instructors, costs, and how to register by clicking here.

The Tampa Steel Conference is perfect for those who are looking for an intimate environment as we anticipate 300-400 executives (compared to 1,000+ at the SMU Steel Summit Conference). The hotel is located in downtown Tampa on the water and the trolley line. This is a perfect event to bring your spouse to and to celebrate Valentine’s Day away from the cold and snow of the northern states (or Canada). There is plenty to do and see in the Tampa/St. Petersburg area. There are white sand beaches on the Gulf of Mexico, golf courses, an aquarium, great shopping and sightseeing. All minutes from a major Florida international airport.

The agenda’s focus is a little different than what you would see at our August conference. The TSC has a focus on trade, trade issues, foreign steel, domestic and foreign steel prices, how the supply chain disruptions are affecting transportation, the ports, and the end users. We believe the Tampa Steel Conference will be helpful to everyone in the industry and will complement our Steel Summit Conference later this year.

Lastly, the Tampa Steel Conference is half the price of attending the SMU Steel Summit Conference. Find out more about costs to attend, discounts available to SMU/CRU member companies and to those bringing more than one person from their company by clicking here.

I believe the next virtual Steel 101 workshop is sold out. We will hold the next Steel 101 workshop in Memphis, Tenn., in person. We will be touring the Nucor Arkansas steel mill, which recently completed an expansion. The next virtual Steel 101 workshop will be held in July. There will be more information coming on the SMU Events website, which you can access by clicking here.

I have already begun the process of selecting keynote speakers for the 2022 SMU Steel Summit Conference, which will be held in Atlanta on Aug. 22-24. We have confirmations from Alan Beaulieu of ITR Economics and Mark Millett, CEO of Steel Dynamics. I expect more confirmations in the coming days from other mill CEOs and special speakers. Registration is already open here.

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

John Packard

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