Final Thoughts

Final Thoughts

Written by John Packard


We received a number of responses to our articles on ethics. We didn’t want to beat a dead horse by producing another article this evening, even though there is plenty to write about. For those of you who have not noticed, Kobe Steel in Japan has admitted falsifying data on materials placed in autos, trains and aircraft. The initial reports do not specifically mention steel – more aluminum and other materials. Nonetheless, the reputation of Kobe Steel may be damaged beyond repair. The mill made an ethical decision to deceive its customers and now they, and perhaps the entire Japanese industry, will be harmed by the lack of foresight and actions of a few. It only takes the actions of a few (maybe even just one) to ruin a company’s reputation. It will be interesting to watch what happens to Kobe Steel in the coming weeks and months.

I mentioned this yesterday but I want to put it out there again today, we will be accepting sponsors and exhibitors for our 2018 SMU Steel Summit Conference in the coming days. If a commitment is made now, you have the option of either being billed and paying during calendar year 2017 or waiting to be billed after the first day of the New Year. If you have questions or would like to receive a sponsors/exhibitors package, please send an email to: info@SteelMarketUpdate.com. We anticipate attracting 750 attendees to our 2018 conference.

We will also be going out to take orders for 2018 advertisement space in our newsletter and on our website. The top banner ad has been selling out each of the last two years well before the beginning of the New Year, so if you have interest please send an email to info@SteelMarketUpdate.com.

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.