Final Thoughts

Final Thoughts

Written by Michael Cowden

I’d halfway expected to see hot-rolled coil prices come down this week.

A few of you made the case for price declines. The logic: softer demand meeting increased domestic supply and higher import volumes. Some of you also noted that lead times, while not bad, were hardly strong enough to support another round of price hikes.

But that’s not what we saw this week.

 Steel SummitDon’t get me wrong, I can see that logic. Flat-rolled steel imports were at their highest level in June since August of last year. New capacity (with the exception of the hot end at SDI Sinton) continues to ramp up. And early July is rarely prime time for demand.

Producers should be content that the $50-per-ton ($2.50/cwt) price increases announced in June stopped the bleeding, according to that line of thinking. And they do appear to have accomplished that. I’ve heard rumors of some very large buys, probably not “repeatable” ones, in the $700s per ton. Bigger, repeatable spot buys might be in the mid-$800s per ton. But mills aren’t being shy on sticking to $900 per ton for smaller spot deals and offering as much as $950 per ton.

Will producers manage to nudge prices into the $900s and keep them there? We’ll see. Rumors of another round of increases, in the market since late June, are still there.

I don’t want to overstate the impact of the unplanned outage at SDI Sinton. But I think it’s fair to say that it will at least tighten supplies on the margins. The company says it will be a two- four-week outage. I can’t speak to the particulars of this one. But I’m guessing two weeks is the best-case-scenario. Best case rarely happens, so I wouldn’t be surprised if the outage stretches more toward the four-week range.

I also don’t want to understate seasonality. Early July is always slow because of seasonal shutdowns at automakers and other big end users. Those folks will be coming back to the market over the next couple of weeks. We’ll have a better sense then of what demand will be like in 2H. If it’s still on solid footing, I wouldn’t be surprised if mills do indeed roll out another round of price hikes.

SMU Steel Summit

Here is one area where I can say without hesitation that numbers are going up: SMU Steel Summit on Aug 21-23 at the Georgia International Convention Center (GICC) in Atlanta.

Approximately 950 people are registered to attend. We typically see a big increase in registrations for the event as people come back from vacations in early July.

If you haven’t registered yet, you can register here. Our discounted room blocks are full. But there are still plenty of rooms available within two miles of the event.

Also, the Steel Summit App is now live. Details are here. I’m going to be loading my profile soon. I’d suggest you do the same.

It’s great to see almost the entire steel community assembled in one place. It can also be hard to pick out someone you want to meet in a room of 1,000 or more.

Keep in mind that the app allows you not only to schedule meetings and network but also to ask questions of speakers and participate in the event.

If you’ve already registered for Steel Summit, you received instructions today on how to create your profile in the app. If you haven’t registered yet, what are you waiting for?!

I look forward to seeing you in Atlanta at Steel Summit as does the rest of the SMU team. And thanks, as always, for being part of our community.

By Michael Cowden,

Michael Cowden

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