Final Thoughts
Final Thoughts
Written by John Packard
July 24, 2022
The SMU Steel Buyers Sentiment Index collapsed last week to the lowest reading we have had since the early days of the pandemic.
Current Sentiment, which is how companies feel about their ability to be successful in the current market environment, came in at +43 compared to the +60 recorded just two weeks ago. The +43 is the lowest reading we have seen since April 2020, when the pandemic was in full swing.
The Future Sentiment Index, which measures how companies feel about their ability to be successful three to six months into the future, was also +43. That is the lowest level recorded for this index since August 2020 – when we saw the lowest prices of that year.
Domestic steel mills have been very bullish in their comments about the state of the industry during their earnings conference calls with analysts. Our Sentiment Index is technically still in optimistic territory and nowhere near the negative levels seen in 2008 during the Great Recession.
Sentiment is being affected by steel prices that are moving lower week to week. Our average HRC price from last week was $875 per ton ($43.75 per cwt), with the low end at $800 per ton. Lower prices have a negative impact on steel distributors, and service centers were the largest market segment reporting during last week’s survey of the market.
We will need to watch this carefully to see whether prices and demand are bottoming out, as they did in August 2020, or whether they still have room to fall. Our Steel Summit conference is perfectly timed to discuss this and many other topics impacting the steel industry.
We have seen a flurry of activity as we begin the countdown to the start of the 2022 SMU Steel Summit Conference, which will be held at the Georgia International Convention Center on August 22-24. I want to commend Jill Waldman and our events team for the work they have done to date, and for the work they will be doing over the next few weeks to ensure we have an exceptional event.
There will be many new speakers, new agenda topics, a new conference app, new exhibitors, as well as a couple of show and tell items (like an electric semi-truck).
We are now less than a month away from the start of the 2022 SMU Steel Summit Conference. Registrations continue to come in, and we are now past 1,000 total. We also continue to see new companies registering for the event this year. With about four weeks left, we anticipate that 1,100-1,200 executives will attend the conference.
Here are the most recent registrations received. Companies with an asterisk (*) means more than one person is registered from that company: Alter Logistics, American Consolidated Industries Inc.*, Graber Post Buildings Inc.*, Grupo ABX*, High Steel Service Center*, Honda Development and Manufacturing of America, Host Terminals LLC, Imperial Pools Inc., ITW Shakeproof Automotive, Knapheide*, Lapham-Hickey Steel*, Locamation, Mainline Metals Inc., Nelsen Steel Company*, Opta Group LLC, Overhead Door Corp., Paramount Metals and Supply Co., POSCO America Corporation, Sarralle US*, Space Plus USA, Steel Coil Store LLC*, Stemcor USA Inc.*, Tarter Farm and Ranch, The Mercury Group, USS-UPI*, Vision Metals, VOSS Steel, Watco, Welser Profile North America, Willbanks Metals Inc.
You can see all of the registered companies here. To join them click here.
If you are already registered, you can download the SMU Steel Summit Conference app on your phone or laptop through your app store. You should have already received information about how to get into the app. If you have any questions, please contact conferences@crupgroup.com
As always, your business is truly appreciated by all of us at Steel Market Update.
John Packard, SMU Founder
John Packard
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Final thoughts
Unless you've been under a rock, you know by know that Nucor's published HR price for this week is $760 per short ton, down $65/st from the company’s $825/st a week ago. I could use more colorful words. But I think it’s safe to say that most of the market was not expecting this. For starters, US sheet mills never announce price decreases. (OK, not never. It has come to my attention that Severstal North America rescinded a price increase back on Feb. 14, 2012. And it caused quite the ruckus.)
Final thoughts
Is it just me, or does it seem like the summer doldrums might have arrived a little early? I could be wrong there. It’s possible we could see a jump in prices should buyers need to step back into the market to restock. I’ll be curious to see what service center inventories are when we update those figures on May 15. In the meantime, just about everyone we survey thinks HR prices have peaked or soon will. (See slide 17 in the April 26 survey.) Lead times have flattened out. And some of you tell me that you’re starting to see signs of them pulling back. (We’ll know more when we update our lead time data on Thursday.)
Final thoughts
Everybody has a plan… until they’ve dealt with volatility in the HRC market. While Mike Tyson’s original quote was about getting punched in the mouth, it’s unlikely the ex-champ has gone many pricing rounds with hot-rolled coil.
Final thoughts
Hold-rolled (HR) prices held roughly steady this week after slipping for much of April. I don’t have any spicy quotes to offer about mostly flat prices. Besides, a lot of the questions I’ve gotten recently have been about demand. Some of you tell me that it’s still stable or improving. Others tell me that it’s suddenly dried up.
Final thoughts
What a difference a month makes. In late March, it seemed like the US hot-rolled (HR) coil market was poised to cycle upward. Large buyers had re-entered the market and placed big orders earlier in the month. Several outages were underway or upcoming. And expectations were that lead times would continue to extend. Cliffs said […]