Final Thoughts
Final Thoughts
Written by Becca Moczygemba
March 2, 2023
Weekly pricing increases are giving a new reason to have the “Sunday Scaries.” But as we wind down this week, all is quiet on the western front, so far.
With regular news of price hikes, hearing mixed opinions from the market is no surprise. For every optimistic view, there’s a louder pessimistic one.
We have certainly heard our fair share of reports of stable demand. Some are even reporting strong backlogs into the third quarter. But on the flipside, there are plenty of buyers on the sidelines waiting for lower prices. That is, if and when those lower prices come.
The word “unprecedented” gets thrown around quite often. It makes me wonder, when does unprecedented just become the norm? Precedented or unprecedented, I’ve been in this industry long enough to know that there are highs and lows. You do the best you can to buy at the lowest price from the most reliable suppliers. And you never put all your eggs in one basket. Regardless of contract or spot buys, the end goal is always the same: Get the customer what they need as soon as possible, at a mutually beneficial price. Sometimes hitting the target comes at a premium.
So, we should simply accept high prices? No. However, broadening awareness to nuances around the market is integral to better understanding it. It’s easy to point fingers and break out the pitchforks and torches. But there’s always more than meets the eye.
We’ve seen that service centers are increasing prices. We’ve also heard that foreign, while still not the cheapest, is closing in on domestic pricing. Lead times will dictate which one pulls ahead. Regardless, production lines need to continue to run, orders need to be filled.
Whether you’re trying to fill holes in inventory, trying to get ahead on backlog, or sitting on the sidelines, three things are certain in life: death, taxes, and pricing changes in the steel business.
By Becca Moczygemba, becca@steelmarketupdate.com
Becca Moczygemba
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I want to draw your attention to SMU’s monthly scrap market survey. It’s a premium feature that complements our long-running steel market survey. We’ve been running our scrap survey since late January. And over just that short time, it’s become a valuable way not only for us to assess where scrap prices might go but also to quantify some of the “fuzzy” indicators - like sentiment and flows - that help to put the price in context.
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We're about to hit 50% Section 232 steel tariffs. What could happen?