Final Thoughts

So I’ve had to adjust what I was going to write about as news continued to unfold.

Of course, until we send out the newsletter, I might have to eat those words. An after-market-close tariff announcement is never off the table these days.

We’ve been so accustomed to President Trump dropping bombshells on Fridays, it was almost nice to get a whopper from a non-White House story. And on a Tuesday no less, with the announcement of the Ryerson/Olympic merger.

Well, the hits kept rolling. So, I plugged our articles on the Ryerson/Olympic service center partnership, Algoma’s earnings loss/CEO Michael Garcia retirement, and Cleveland-Cliffs’ Memorandum of Understanding with POSCO into ORAC, SMU parent company CRU’s proprietary AI.

Service center consolidation, a widening net loss, shuffling of the management deck, and MoUs with foreign steelmakers are nothing we haven’t seen before. But to all land in the space of three days is pretty impressive.

I asked what trends to expect in the next six months based solely on those articles. I’ve included a few of the items that had at least moderate/high likelihood below, with light editing.

Forecasts:

More strategic alliances and cross‑border deals to satisfy origin/trade rules (high likelihood)

Drivers: The Cleveland‑Cliffs MoU with POSCO — explicitly timed with the US–Korea trade agreement — signals a near‑term wave of partnerships where foreign mills use US footprints to meet country‑of‑origin requirements. That will increase competitive pressure on purely domestic mills and change near‑term flows of product into US channels.

Acceleration of M&A and consolidation among service centers (moderate–high likelihood)

Drivers: The scale rationale and $120-million synergy case from the Ryerson/Olympic Steel merger show that buyers and service centers will pursue deals to cut costs and diversify product mix while demand is weak. Expect at least one more deal or announced merger activity among regional service centers within six months.

Policy and trade signals will be a key swing factor — expect heightened market reaction to any US trade policy or US–Korea agreement implementation details (high likelihood)

Drivers: Tariffs and trade rules are already shifting behavior (e.g., government liquidity to Algoma, Cliffs‑POSCO timing). Any clarification, waivers, or enforcement updates will quickly move flows and pricing in the short run.

We’ll be waiting

While some of these seem like intuitions available to us mere humans, ORAC really threw its hat into the ring with one more expected service center merger within the next six months. Now, we repeat: this is just a machine spitballing and not actionable information. We’ll see how that one turns out, looking back six months from now.

Yes, we will definitely circle back.

I will see your news, and raise you…

As I mentioned earlier, the Trump administration has a habit of releasing major news on Friday afternoons. Have we teed up the kind of situation where President Trump, with the stroke of a pen or an offhand remark, is going to cause all of us to be spending a little time in the office this weekend? Time will tell…

In the meantime, SMU’s latest survey data has just dropped. While our Steel Buyers’ Sentiment article will be published in Sunday’s newsletter, there is some encouraging news I’d like to tease.

From looking at that data over the last three years, I know that steel buyers are an optimistic bunch, definitely not in “The sky is falling” camp.

Now, the survey closed on Wednesday afternoon, but there are still some reassuring data points. Both the Current and Future Sentiment Indices rose this week, with Current Sentiment showing the most significant movement since mid-May.

Things are looking up, at least according to steel buyers…. We just have one more day in the week. Excited to see how the story plays out.