Final Thoughts

Final Thoughts

Written by John Packard


I am at 35,000 feet and, according to the monitor in front of me, we are traveling at 564 miles per hour and are located over the state of Utah. After working with a great group of attendees at our California Steel 101 program, I am on my way to New York City, where Tim Triplett and I will attend meetings hosted by the LME and Bank of America Merrill Lynch steel and mining analyst Timna Tanners.

We will be in New York City for a couple of days, returning to our offices on Wednesday of this week. If you are planning on being in the city on Monday or Tuesday and would like to meet with me, please send me an email (John@SteelMarketUpdate.com) or text me at 770-596-6268.

If you see the handsome guy in the photo on the left in the Marriott Marquis or on the streets of New York City – stop me and say hello.

I want to take a moment to welcome those who are new to Steel Market Update. I want to thank you for becoming a new member, for attending our Steel 101 workshop, or for registering for a trial to our newsletter and website. I encourage you to spend some time reviewing the contents we have on our website, as well as enjoying our newsletter, which is published on Sunday, Tuesday and Thursday evenings. If you have questions about our website, please contact Brett@SteelMarketUpdate.com. If you have questions or suggestions about the content in the newsletters, please contact me at John@SteelMarketUpdate.com.

I heard from one of my scrap sources who advised that the July ferrous scrap market appears poised for sideways movement. There could be some weakness in primes (busheling/bundles) as pig iron prices have dropped. We will have more on the scrap markets once we get into negotiations between the steel mills and their scrap suppliers.

As always your business is truly appreciated by all of us here at Steel Market Update.

John Packard, Publisher

Latest in Final Thoughts

Final thoughts

SMU’s sheet prices firmed up modestly this week, even as CME hot rolled futures declined. What gives? My channel checks suggest that demand remains stable and that buyers have returned to the market following new HR base prices announced by mills earlier this month. I’m looking forward to seeing whether lead times, which have stabilized, will start extending. SMU will have more to share on that front when we release updated lead time figures on Thursday. As for HR futures, what a reversal! As David Feldstein wrote last Thursday, bulls expected mill price increase announcements. And we briefly saw the May contract climb as high as ~$1,000 per short ton (st).

Final thoughts

There’s that concept from Adam Smith we all learn about in our Econ 101 classes: The Invisible Hand. A simple Google search will provide a refresh, but if memory serves I would classify it as something akin to “the market is magic” or “the market’s gonna market.” Today, obviously, we live in a mixed environment. There are a lot of hands out there, and they’re not too difficult to see. In this election year of 2024, one of the most visible hands out there probably belongs to the federal government.

Final thoughts

SMU’s price for hot-rolled (HR) inched lower this week. I wouldn’t be surprised, however, if we start to see prices and lead times move higher in the weeks ahead. The modest declines in HR this week are probably the result of lingering deals cut at “old” prices, as sometimes happens after mill price increases. But those deals will probably be out of the market soon if they aren’t already. So why do I float the idea of higher prices? Some big buys have been placed. It reminds me a little of what we saw last fall, when people restocked in anticipation of higher prices once the UAW strike was resolved.