Final Thoughts
Final Thoughts
Written by Becca Moczygemba
March 9, 2023
How many different ways can we write about pricing increases? I had to look at my thesaurus at one point in an attempt to diversify my choice of words.
There are plenty of charts and data that reflect how dynamically pricing has changed over the last month. A good explanation is key to making it digestible to customers.
Taking the time to explain the nuances around pricing can also make a significant difference.
It’s just as important for an account manager or inside salesperson to understand why prices are moving the way they are as it is for an outside sales position.
If you think about it, those individuals interface with the customer on a day-to-day basis. If they have a better understanding of the market, they can provide better service. Sure, you want the outside salespeople to drive pricing negotiations. But there are instances where it’s just as important for the supporting parties to have insight.
Supporting positions shouldn’t be just production entry and customer service. They should be foundations for building knowledge and growth. I like to think of them as the first line of defense. When something goes wrong, the more knowledge one has, the better one will be at handling situations.
I’d be curious to hear how some of your organizations prepare their staff for the next step. Looking for opportunities to improve staff development is never a bad idea. Especially when things are outside the norm.
By Becca Moczygemba, becca@steelmarketupdate.com
Becca Moczygemba
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Steel equities and steel futures fell hard after news broke earlier this week that the US and Mexico might reach an agreement that would result in the 50% Section 232 tariff coming off Mexican steel. The sharp declines didn’t make much sense, especially if, as some reports indicate, Mexico might agree to a fixed quota. They didn't make sense even if steel flows between the US and Mexico remain unchanged.
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Even before the news about Mexico, I didn’t want to overstate the magnitude of the change in momentum. As far as we could tell, there hadn’t been a frenzy of new ordering following President Trump’s announcement of 50% Section 232 tariffs. But higher tariffs had unquestionably raised prices for imports, which typically provide the floor for domestic pricing. We’d heard, for example, that prices below $800 per short ton for hot-rolled (HR) coil were gone from the domestic market – even for larger buyers.
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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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I think there is an obvious case for sheet and plate prices going higher from here. That’s because, on a very basic level, the floor for flat-rolled steel prices, which is typically provided by imports, is now significantly higher than it was a week ago.
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We're about to hit 50% Section 232 steel tariffs. What could happen?