Final Thoughts

“Each month looks to be getting better than the previous month,” said one manufacturer. “Demand is the savior right now. Just imagine if demand was lackluster – hellooo 2009!” said a service center exec.

Another comment we hear a lot these days: “Buyers are sitting on their hands waiting for the price to drop even lower.” Indeed, the data shows that’s true. While 60% of survey respondents called themselves active buyers this month, nearly 40% said they are staying on the sidelines. That’s a big percentage. Just think about how much stronger demand might be if those people got back in the game.  

Buyers can sustain this wait-and-see approach for only so long before they overshoot the mark and find their inventories too low again. If enough of them jump back in the market at the same time, steel prices could actually spike briefly in the near term. But don’t let this dead cat bounce fool you. Supply and demand have a ways to go before they reach some sort of equilibrium. Especially with supply – and all the new EAF capacity – still such a moving target.

Still Time to Register for Tampa Steel Conference

Registrations for next week’s 2022 Tampa Steel Conference have surpassed 400 executives representing more than 240+ companies. And there’s still time for you to join them.

The 33rd edition of the Tampa Steel Conference – to be held at the downtown Tampa Marriott Water Street Hotel – begins with networking and a free boat tour of the Florida port Monday afternoon, Feb. 14, followed by a cocktail party at the hotel.

On Tuesday, Feb. 15, the day begins with a golf outing (separate fees required) and another port tour before the conference kicks off with three special programs on decarbonization, supply chain issues and an economic forecast. After the presentations, there will be a second networking reception at the hotel.

On Wednesday, Feb. 16, the day begins at 8 a.m. ET as the Port Tampa Bay, the mayor of Tampa, and Steel Market Update welcome everyone to this year’s event. A full day of presentations will include a one-on-one interview with Cleveland-Cliffs CEO Lourenco Goncalves, among several other well-qualified and interesting speakers. The program will end at 3:30 p.m.

We invite you to join the more than 400 executives already registered (click here to get a list of companies).

On Monday afternoon, SMU will also be hosting our Introduction to Steel Hedging Workshop with Spencer Johnson of StoneX Financial. We have conducted several of these workshops virtually with Spencer and we are looking forward to our first in-person event. The workshop materials will be covered over two half-days (Monday afternoon and Tuesday morning). You can find more information about the workshop, the agenda, a biography of Spencer Johnson, costs to attend, and how to register by clicking here.

We look forward to seeing you next week in Tampa where the temperatures are forecast to be in the 60s on Monday, upper 60s on Tuesday and mid-70s on Wednesday with no rain. If you extend your stay, the temps will remain in the mid-to-upper 70s for the balance of the week.

Note: A list of attendees’ names, restaurant recommendations and other suggestions is provided to you once registered. Suggested attire is business casual with company logo golf shirts if you have them (makes networking easier). Jackets are not required.

Scrap Hitting Bottom?

Scrap prices may have bottomed for a while. Prime scrap prices declined by another $35/GT in February trading. That’s on top of a $60/GT drop in January. But observers see the scrap market tightening considerably in March from the snowy winter weather that has slowed collections and demand overseas that has boosted exports. Higher scrap prices in the second quarter, combined with rising steel import prices, may help slow the decline in finished steel prices in the U.S.

Said one scrap expert to SMU: “With the bottom of the hot rolled market probably in sight as global finished steel prices increase, demand for scrap from U.S. mills should increase from lower levels in January and February. Throw in the additional EAF production capacity that’s coming this year, and February could prove to be a low point for scrap prices for some time.”

Reshoring Gets a Boost from China

China’s reputation for unethical business practices ranging from unfair trade to intellectual property theft to human rights violations actually has an upside – it’s making American companies rethink their supply chains and move production back home, according to the Reshoring Initiative’s February newsletter. Such famous brands as Apple, Microsoft, Intel and Nike are pulling some work out of China, says the nonprofit at www.reshorenow.org, which is dedicated to bringing manufacturing and good-paying jobs back to the U.S.

As always, we appreciate your business.

Tim Triplett, SMU Executive Editor, Tim@SteelMarketUpdate.com