Final Thoughts

What gives them the confidence to do so?

Lead Times Looking Solid

We’ll update lead times on Thursday. But in an indication of what might be to come, I’ve seen lead times from an EAF mill that begin in late November for hot-rolled – or roughly seven weeks from now.

That sounds like a cold-rolled lead time to me. But for that mill, lead times for cold-rolled are in mid/late December – or roughly 9-10 weeks from now. Add annealing and you could be looking at a 2024 lead time.

I’ve heard similar stories on the Galvalume side, a product that isn’t exposed to automotive. Some of you tell me that demand for G’lume remains firm on continued strong demand for metal roofing as well as for newer applications such as solar.

You might be looking at a December lead time at certain Galvalume producers. Assuming that they can fit you into their schedule at all. If you’re a contract buyer or a regular spot buyer, you’ll probably have no issues. If you’re a “Johnny Come Lately,” you might be out of luck.

I know some of you think that lead times have been inflated by the raft of maintenance outages underway or coming up. That might prove to be true. But that doesn’t change the facts on the ground right now.

UAW Strike: What Will the Rank and File Do?

A lot also hinges on the UAW strike. Some of you think the UAW strike might end sooner than expected. Others think it will be a lengthy battle, one that could result in additional blast furnace idlings.

Preliminary results of our Steel Market Survey this week indicate ~75% of respondents expect the strike, which started on Sept. 15, to last 5-7 weeks. In other words, they think it will be over by the end of this month or by early November. Nearly 25% think the strike will last eight weeks or more – or potentially into the holiday season. I can see a reasonable case for each side.

UAW president Shawn Fain might have been wearing an “EAT THE RICH” T-shirt on Friday when he provided an update on negotiations. But the fact is, he didn’t expand the strikes against GM, Ford, or Stellantis. Mostly because the automakers have been significantly sweetening the pot.

The union has been offered much of what it asked for – including significant wage increases, the restoration of COLA, and union representation at battery plants. How much more can the “Big Three” – which face stiff competition from non-union Tesla and non-union transplants – realistically offer?

GM, for example, was one of the largest corporations in the world in the mid-20th century. That is no longer the case.

It’s been said before that negotiations between the UAW and the “Big Three” are in uncharted territory. Yes, that includes UAW leadership taking the unprecedented step of striking GM, Ford, and Stellantis all at once.

It might also include a more militant rank and file. Case in point: At Mack Trucks union members overwhelmingly rejected a tentative agreement negotiated by UAW leaders. So that’s another variable to consider.

Let’s say automakers make their last, best, and final offers. Let’s say UAW leadership accepts them, and the two sides reach a tentative agreement. The terms might be the most generous the union has seen in a generation.

But would rank-and-file members – who’ve been fired up on talk of 40% wage increases, four-day work weeks, and the restoration of traditional pensions – accept even a once-in-a-generation contract?

Tampa Steel Conference: Jan. 28-30, 2024

The weather has gotten chilly in the Midwest. So don’t forget to book some time away from the cold in January.

The Tampa Steel Conference, which SMU does with Port Tampa Bay, runs Jan. 28-30, 2024.

We’ll have not only a solid program but also outdoor networking, golf, and a harbor tour. Register here, and reserve your spot today!