This time of year my thoughts often turn to the weather. Specifically yesterday, heat cranked up, as I sped to a café because of an Internet service outage. It was cold here in Austin, Texas. Might’ve even dipped down into the teens in the last couple of days. And while the folks in the Midwest and Northeast may scoff at such balmy temperatures, it hits different here. The city sends out text messages telling you to stock up on vital supplies and prepare for the apocalypse.
Of course, a main worry is the electrical grid. When that goes down, all bets are off. People’s minds turn to the great Snowmageddon of the winter of 2021, which left nearly 10 million people without power, mostly in Texas. The National Centers for Environmental Information (NCEI) called it The Great Texas Freeze. THE NCEI said water pipes burst and “boil water advisories” were issued in many counties. Of course, following Murphy’s Law, this all took place during the Covid-19 pandemic.
While grid failure could represent a Category 5 for a household or business, other problems exist as the mercury plunges. With the latest cold snap occurring here in the US, managing your electric vehicle (EV) seems to be rocketing up the list of concerns.
Here’s a sample of headlines within the last 24 hours:
- EV drivers wrestle with cold weather sapping their battery range – NBC News
- Tesla owners say EV batteries won’t charge as brutally cold temperatures hit Chicago – USA Today
- Electric car owners confront a harsh foe: Cold Weather – New York Times
I think we can all agree that the great brains who have pioneered EV development did not imagine their vehicles only being driven in south Florida. (Though how to charge your EV as a hurricane approaches could be another issue.)
Still, as a corollary to what is termed “range anxiety” regarding EVs, we can perhaps add something new: Winter Worry? Or for the acronym minded: Cold-Activated Battery Syndrome (CABS). Because you’re worried you might need to hail one if your EV goes out? Well, let’s face it, you’d probably get an Uber.
With automotive a key market for steel, it’s important to put things in perspective. While there could be hiccups along the way, the overall trend is towards electrification of the fleet. In my recent conversation with Worthington Steel Geoff Gilmore, he was upbeat on the trendline of EVs. He said that even though the growth wouldn’t be a “straight line,” EVs seem to be the where market is heading.
Whatever happens in the presidential election this year, infrastructure is sure to remain a focus. The US is going to be busy strengthening the grid. We don’t really have a choice. And innovators in EVs will be tinkering with those batteries.
If cell phones can go from the size of a briefcase to that smartphone in your pocket, surely the engineers can figure out a recipe to beat the wintry frost? As for me, it’s supposed to climb to 70F as I write this in the early afternoon on Thursday, according to KVUE. Sure, it may be 36F tonight, and 47F tomorrow. But for today, here in Texas, I could be faced with that age-old issue of survival: I really hope my air conditioning works.
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Domestic prices have been sliding since the beginning of the year, and I don’t see any obvious reasons why the slide might stop this week. But let’s put the timing of a bottom aside for a minute. The question among some of you seems to be whether we’ll see another price spike, or at least a “dead-cat bounce,” before the typical summer doldrums kick in.
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.
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?
Everyone knows the old saying that “a picture is worth a thousand words.” Just because it’s a cliché doesn’t mean that it’s wrong. A lot of inked has been spilled trying to figure out why prices are falling now. I thought it might be as simple as this: Market dynamics in the fourth quarter (UAW strike, companies buying ahead of an anticipated post-strike price spike, etc.) pulled forward restocking activity that typically happens in the first quarter.
What a difference a month makes. There are a few full bulls left in the room, but their numbers are dwindling. We’ll release results of our full steel market survey tomorrow afternoon. I took a sneak peak at the data on Thursday. And more people than I expected think that US hot-rolled (HR) coil prices will be in the $700s per short ton (st) two months from now. Vanishingly few think prices will be above $1,000/st in mid-April.