Final Thoughts

Final thoughts

Written by Ethan Bernard


The end of the year is often both a time for reflection, and for looking ahead. You make sense of the ups and downs from January through December. Then you wipe off the old crystal ball, and try to make out what’s in store for the next 365 days. (Also, on a personal level, perhaps you even throw in a resolution or two. Maybe target 10k steps daily, or become an SMU market survey participant.)

Yes, here at SMU we more than understand that impulse to see into the future. But we’re not in the forecasting game… until now. That is, everybody is talking about 2024. We, however, are jumping to the real Future, like far away and stuff. Let’s take a (not-so-serious) look at the distant world of 2124, ONE HUNDRED YEARS FROM NOW. And, no, we are not going to mention robots or aliens. That’s so 2023!

International relations

Call us optimistic, but we think 2124 will be the year when the EU and US reach a final deal on The Global Arrangement on Sustainable Steel and Aluminum. Yes, it’s been over a hundred years in the making, and generations of negotiators are not even sure what they are negotiating at this point. However, a general consensus has formed that if the can is kicked any further, said can will simply turn into dust.

‘X’ marks the spot

In a deal valued at $15 ga-gillion (inflation has not been kind to US dollar), Elon Musk has decided to buy U.S. Steel. Not the company, just the stock symbol. Musk, at this point only a disembodied consciousness uploaded into a quantum computer, has finally chosen to corner the market on all things X. While most general uses of the letter will require a licensing fee—in an act of charity—the word “Xmas” will be deemed fair use.  

Roads?

Have you ever looked at your smartphone with a disappointed look and said, “This is what I get for the future?” Well, not in 2124. Personal flying cars have gone mainstream, and into the jet stream. (Yes, the regulatory hurdles dragged on for about 100 years.) Sure, those hoping for highway infrastructure dollars might take a hit. However, steel companies will find a windfall in the new market for FCS (flying-car steel). Advanced, high-strength, and somehow anti-gravitational, look to FCS to be THE market of 2124.

Brown steel

With the success of net-zero initiatives by 2050 all over the world, an unexpected problem rears its head. Strange weather patterns appear and climate scientists warn that a new ice age is approaching. The only answer is, you guessed it: Recarbonization. Coal futures explode. The race will be on as the best and the brightest try to rediscover 19th century open-hearth steelmaking technology. Will they do it in time?

Steel Summit 2124

With its exponential growth over the previous 100 years, there will be only one venue left big enough to host Steel Summit 2124: Mars. Luckily, advances in the FCS market have really brought down the prices on interplanetary travel. Also, it turns out the weather on Mars is not all that different from Atlanta. (Once one takes into consideration the artificial atmosphere, of course.) We hope to see you, or your descendants, there!

In all seriousness, folks, all of us at SMU wish you and your loved ones a happy holidays and New Year, and are grateful for your business! On a less grandiose time scale, we hope to see you next month at our Tampa Steel Conference 2024. And, for those interested, here’s a more mundane SMU survey look at what you all will think will happen in 2024.

Ethan Bernard

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Final thoughts

I’ve had discussions with some of you lately about where and when sheet prices might bottom. Some of you say that hot-rolled (HR) coil prices won’t fall below $800 per short ton (st). Others tell me that bigger buyers aren’t interested unless they can get something that starts with a six. Obviously a lot depends on whether we're talking 50 tons or 50,000 tons. I've even gotten some guff about how the drop in US prices is happening only because we’re talking about it happening.

Final thoughts

We’ve all heard a lot about mill “discipline” following a wave of consolidation over the last few years. That discipline is often evident when prices are rising, less so when they are falling. I remember hearing earlier this year that mills weren’t going to let hot-rolled (HR) coil prices fall below $1,000 per short ton (st). Then not below $900/st. Now, some of you tell me that HR prices in the mid/high-$800s are the “1-800 price” – widely available to regular spot buyers. So what comes next, and will mills “hold the line” in the $800s?