Federal Reserve Chairman Jerome Powell delivered a dire forecast for the U.S. economy should the government fail to provide ongoing financial support for businesses and workers and warned of potential “lasting damage” to the economy. “The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II,” […]
World Trade Organization Director-General Roberto Azevêdo announced he will step down from his second term one year early, on Aug. 31. Azevêdo called it a “family decision.” “It is not health-related (thank goodness). Nor am I pursuing any political opportunities,” he added. Stepping down now will avoid creating complications ahead of preparations for the MC12 […]
Bank of America is forecasting a slow recovery from the coronavirus crisis, one that will take years not just months, said Metals and Mining Analyst Timna Tanners, who was the featured guest speaker during Steel Market Update’s Community Chat on Wednesday. Bank of America economists anticipate a global recession in the second and third quarters. […]
Canadian steelmaker Stelco sold out its mill and shipped to capacity despite the coronavirus pandemic in the first quarter of 2020. CEO Alan Kestenbaum attributes a higher value mix, excellent service to customers and a tremendously loyal customer base for its ability to fill order books when competitors are struggling. The company shipped 621,000 net […]
The following article on the hot rolled coil (HRC) steel and financial futures markets was written by Jack Marshall of Crunch Risk LLC. Here is how Jack saw trading over the past week: Steel A large drop in the HR index used to settle the CME HR contract last week helped push April to settle […]
By CRU Chief Economist Jumana Saleheen, from CRU’s Global Steel Trade Service Many are still discussing what type of recession will ensue following the Covid-19 pandemic. Will it be U-, V- or L-shaped? Different people may refer to the same shape to mean different outcomes. To bring clarity to this issue, this insight sets out […]
By CRU Managing Consultant Ben Jones, from CRU’s Steel Sheet Products Market Outlook Understanding the shape and nature of the Covid-19 cycle will be critical to commercial success, and in some cases, survival of many industry players. Traditional thinking about pathways back to normality (e.g. V, U, W, L shaped recoveries) ignores the potential for […]
The COVID-19 crisis devastated manufacturing across the globe in April. The pandemic laid low virtually all economies, plunging the J.P. Morgan Global PMI to 39.8 for the steepest contraction since the financial crisis of 2008/2009. China, although still in contraction, fared the best of the nations surveyed and helped to soften the downturn. Excluding China, […]
By CRU Chief Economist Jumana Saleheen and CRU Economist Ippolito Tarabini, from CRU’s Steel Sheet Products Market Outlook Lockdowns continued into April. They resulted in a fall in activity, particularly in the hospitality, entertainment and travel sectors. Using estimates of the loss of output by sector, we find that one month of lockdown lowers the […]
Canadian steel mill Stelco has entered into a new eight-year pellet sale and purchase agreement with U.S. Steel. The eight-year contract runs until Jan. 31, 2028, and will provide 100 percent of Stelco’s iron ore pellet requirements at Lake Erie Works including volume required to support the expansion in production projected after the upcoming blast […]
The ISM Report on Business dropped 7.6 percentage points to a PMI reading of 41.5 in April, indicating a sharp contraction of economic activity in the manufacturing sector. Additionally, the overall economy contracted for the first time in 131 consecutive months. “Comments from the panel were strongly negative (three negative comments for every one positive […]
Both steel and scrap prices decreased in the month of April, down anywhere from $15 to $75 per ton between each product, as the effects of the coronavirus shutdowns impacted the market. SMU Buyers Sentiment Index readings showed significant declines over March, with Current Sentiment sliding into negative territory and reaching a low of -8, […]
Timna Tanners, metals and mining analyst for Bank of America, will be the guest speaker for the next SMU Community Chat, beginning at 11 a.m. ET on Wednesday, May 6. Tanners raised eyebrows last year with her prediction that the mills’ many planned capacity additions would oversupply the market in the next few years and […]
Timna Tanners, metals and mining analyst for Bank of America, will be the guest speaker for the next SMU Community Chat, beginning at 11 a.m. ET on Wednesday, May 6. Tanners raised eyebrows last year with her prediction that the mills’ many planned capacity additions would oversupply the market in the next few years and […]
This week’s SMU comparison of foreign and domestic hot rolled prices shows that U.S prices are becoming even more advantageous over foreign imports, according to SMU and CRU indices. The price gap between domestic HRC compared to German and Italian products has widened significantly over the past few months, and the East/Southeast Asian price spread […]
A strong beginning to the first quarter in Mexico supported shipments for Ternium S.A. as operations were locked down in South America due to the COVID-19 pandemic. The company expects shipments to decrease about 30 percent in the second quarter and increase going forward in the second half of the year. “We don’t see a […]
SMU contributor Tim Stevenson is a partner at Metal Edge Partners, a firm engaged in Risk Management and Strategic Advisory. In this role, he and his firm design and execute risk management strategies for clients along with providing process and analytical support. In Tim’s previous role, he was a Director at Cargill Risk Management, and […]
The Chicago Business Barometer dropped to its lowest level since the recession in March 2009. The April PMI plummeted 12.4 points to 35.4, said MNI Indicators. New orders and production recorded the steepest declines, falling 21 points and 19 points, respectively. The order backlogs index eased 7.4 percent after reporting gains in February and March. […]
Steps to contain the spread of COVID-19 have dealt a serious blow to construction, which is the largest market for steel. Construction will be the focus of this week’s SMU Community Chat. Two out of three construction executives responding to an April 20-23 survey by the Associated General Contractors of America reported that they are […]
By CRU Principal Analyst Josh Spoores and CME Group Commodities Research Analyst Gregor Spilker The CME Group recently launched a new steel futures contract which follows the U.S. hot-dipped galvanized (HDG) coil market. The U.S. Midwest Domestic Steel Premium (CRU) Futures is financially settled against the difference between U.S. Midwest hot-dipped galvanized coil (base) steel […]
Durable goods orders plummeted 14.4 percent in March to $213.2 billion, said the U.S. Census Bureau in its latest report. The decrease followed three consecutive months of increase and was the largest monthly decline since August 2014. Transportation equipment led the decrease in March falling 41 percent to $51.2 billion. Commercial aircraft and parts plunged […]
The COVID-19 pandemic has undoubtedly taken a toll on American lives and the economy. The first case of the disease in the U.S. was reported 88 days ago on Jan. 22. As of April 21, there have been 784,326 reported infections and 42,094 deaths. The toll on the U.S. economy has been devastating. Stay-at-home orders […]
Economic activity contracted “sharply and abruptly” last month, according to the Federal Reserve’s Beige Book report. The report, covering activity through April 6, showed leisure and hospitality industries bearing the brunt of the decline. “All Districts reported highly uncertain outlooks among business contacts, with most expecting conditions to worsen in the next several months,” said […]
This week’s SMU comparison of foreign and domestic hot rolled prices shows that U.S prices continue to remain advantageous over foreign imports, even further so than two weeks ago, according to SMU and CRU indices. The price gap between domestic HRC compared to German and Italian products has widened significantly over the past few weeks, […]
The following article on the hot rolled coil (HRC) steel and financial futures markets was written by Jack Marshall of Crunch Risk LLC. Here is how Jack saw trading over the past week: Steel Falling demand and mill capacity utilization rates below 60 percent do not seem to have damped the HR futures curve since […]
The Empire State Manufacturing Survey plunged to its lowest level ever, falling 57 points to a reading of -78.2, in April. “By way of comparison, the lowest level this indicator had reached prior to April was -34.3 during the Great Recession,” said the New York Federal Reserve. New York City has been the epicenter for […]
The U.S. dollar strengthened against 14 of the 16 steel and raw materials trading nation currencies in the last three months and also in the last month. There was a turnaround in the last seven days when the dollar weakened against 14 of the 16. In the last three months, the currencies of Brazil, Mexico, […]
Manufacturers and distributors up and down the supply chain have been disappointed to learn that their insurance coverage does not protect them from the coronavirus. “Pandemic outbreaks are uninsured because they are uninsurable,” said David A. Sampson, president and CEO of the American Property Casualty Insurance Association (APCIA), the trade group for home, auto and […]
SMU contributor Tim Stevenson is a partner at Metal Edge Partners, a firm engaged in Risk Management and Strategic Advisory. In this role, he and his firm design and execute risk management strategies for clients along with providing process and analytical support. In Tim’s previous role, he was a Director at Cargill Risk Management, and […]
In a new trade outlook by the World Trade Organization, WTO Director Roberto Azevêdo called the global economic situation “ugly.” “The unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself,” said Azevêdo. “The immediate goal is to bring the […]