Final Thoughts

Meanwhile, scrap prices appear poised for gains in January. It’s just a question of how much.

I tend to focus on sheet in these columns. But ICYMI, plate mills announced $40/st price increases over the holidays.

Sentiment and full survey data

We’ll release steel buyer sentiment data on Friday along with (for our premium subscribers) full survey results. I peeked at the preliminary data today. And it looks like current sentiment is up while future sentiment is down. That actually makes sense.

As far as current sentiment goes, that data above suggest the market is tight and prices are likely to rise further. As we’ve reported before, both imports and service center inventories are down – which limits supplies during what is typically one of the most active periods for steel buying. (That link is to November service center inventories. We’ll release December data to our premium subscribers on Jan. 16.)

So why somewhat muted future sentiment? While imports are limited now, foreign prices are becoming more attractive – even with the 50% Section 232 tariff. Anything ordered now probably won’t arrive until the spring. But could we see increased import volumes then?

Maybe future sentiment also reflects uncertainty about demand. Can automotive really pull more steel with interest rates still relatively high? Will demand-related data centers prove to be as strong as hoped? We’ll see.

And then there is speculation about whether Section 232 tariffs on imports from Canada will remain at 50%. More on that in a moment.

A lot of M&A underway

Let’s not forget about the wave of mergers (or at least attempted mergers) we’re seeing now across the steel supply chain.

At the mill level, there was big news this week: SDI and Australian conglomerate SGH made an $8.8-billion offer for Australian steelmaker BlueScope, the parent company of North Star BlueScope and downstream businesses such as Steelscape on the West Coast. (SDI has a helpful map of them here.)

It turns out that was SDI’s fourth offer since 2024. And BlueScope’s board rejected the latest offer as well, arguing that the company is worth more. The obvious next question is whether SDI and SGH will offer more, whether another company might enter the fray, or whether the issue drops off the public radar again.

And that’s hardly the only M&A story out there.

Here are some I think we’ll be covering in the days and weeks ahead.

When in Q1 will the Ryerson-Olympic merger close? Again, the companies have already announced Q1. But now that Q1 is upon us, when exactly? (That’s an important questions for some concerned about “synergies”.)

What will the Cliffs-POSCO deal look like? Cliffs has said the deal will be “transformative.” The Korean press has reported that POSCO will take at least a 10% stake and invest more than $700 million. That’s a big deal. But maybe less than transformational if the definition of that is billions of dollars?

And then there is the question of how Worthington acquiring Klöckner & Co. (assuming a deal happens) might reshape the service center space. It’s also worth noting here Canadian service center Russel Metals closed on its deal for seven Klöckner locations in the US earlier this week.

A reline, outages, and trade/tariffs

There is plenty of industry news that we’ll be keeping an eye on too.

When will U.S. Steel confirm dates for the $350-million reline project for the Gary Works No. 14 blast furnace? And could any inventory building ahead of that impact availability from the company?

How will spring outage season shape up? As we get more information, we’ll try to put together a chart like we did here for fall maintenance season.

Also, what’s next for Section 232 tariffs? Will there eventually be a deal with Canada?

There is some chatter that tariffs on Canada (historically one of the largest suppliers of foreign steel to the US) might come back down to 25% ahead of the USMCA review, which should happen by July 1. Such hopes/concerns seem to be anchored by experience in 2019, when the US dropped Section 232 tariffs against Canada (and Mexico) ahead of USMCA going into force the next year.

I don’t know how likely that is. I remember people telling me in June that the tariffs on Canada would be removed by the end of the year. It looks like that might have been the plan but that it was derailed by a TV ad that upset Trump?

In any case, it’s also a little hard to see a tariff reduction given current geopolitics. But geopolitics is above my pay grade.

What I do know is this: The Supreme Court could decide on the legality of President Trump’s International Emergency Economic Powers Act (IEEPA) tariffs as soon as Friday. That should have no bearing on Section 232 tariffs. But it will be interesting to see how it all plays out – especially if the court rules against Trump.

Such an outcome might be a nightmare to administer. But it would give our trade attorney columnists – Lewis Leibowitz and Alan Price – plenty to write about.

The Tampa Steel Conference is almost here!

Both Lewis and Alan will be speaking at the Tampa Steel Conference, which is a little over a month away.

We’ll set sail on Wednesday, Feb. 11, and we’ll bring attendees back to port on Friday, Feb. 13. We hope they’ll be enriched by the presentations, fireside chats, and networking along the way. You can find the full agenda here and register here.

I thought of making a postcard for the event. I’m no graphic designer, so I asked our proprietary AI tool to generate one. I suggested it incorporate steel, pirates, and palm trees. Here is what it came up with:

But maybe some of you have decided to stay an extra day in Florida with someone special. After all, Saturday is Valentine’s Day. I asked AI to incorporate love as well. The results are here:

Speaking of steel, that’s a little Danielle Steel. Anyway, let me know which you prefer. If not postcards, we *might* have enough time to make new stickers in time for the event.

And in the meantime, thanks to all of you for your continued support of SMU. We really do appreciate it.